Technicals are turning, but it is best to trade, not invest, cautions Jeff Greenblatt.
Last week I shared what I thought was the development of a new leg up for Gold. I showed you a chart that had reversed with a low of $1,874.2 (on the continuation) at 75 hours down.
Realize the actual contract you are trading will have slightly different numbers, but you should be able to find symmetry using these concepts (see chart below). From where we were at last week, the best strategy was to look for a pullback. As it turned out, there were two opportunities. One had a 47% retracement with a low to low difference at 45.5, which rounds to 46.
The next pullback started at a $1,974.80 high and pulled back 46 bars on a 30-minute chart (see below). This is a key feature of the Kairos method of price and time squaring. Patterns display replication. In other words, they creatively repeat similar numbers over and over. Do you see how many ways the numbers 74/75 and 46/47 appear?
These become important pivots. This is the most precise way to buy a pullback simply because you are not using any lagging indicators, rather you are reading the pattern at an extremely high level. Don’t try this without properly doing your due diligence on a simulator until you completely understand how it works. Most traders never look, all you need to do is start seriously studying patterns and you’ll find what you are looking for.
With that being said, the U.S. Dollar failed again. This one is a little more complicated but as you’ll see, you can set your Rolex to the precision of the market. The reason why so few ever figure this out is many traders don’t wrap their minds around the fact markets are non-linear. If you look for the reading in a box, you’ll be disappointed. In this case, the latest high skipped a pivot.
We must go back to the high back on May 14 to find the high to high calculation is 6.64 and the time element is 64 days. The key point is the 0.64. Most traders who do understand some chaos theory will only go back to the prior pivot and when it doesn’t line up, its an opportunity missed. But non-linear means the market will do whatever it wants to do, whenever it decides to make price and time work.
So, whether it’s buying a pullback on an intraday chart or selling a bounce on a larger time frame, the concepts are the same. These tendencies will repeat. The market will do what it deems necessary to make price and time line up in some way. I’ve shown you lots of E-mini or E-micro patterns on a one-minute basis. Everything I ever learned about patterns, I first learned on the one-minute chart, it is my laboratory. You may never trade a one-minute chart, but you will get better than a college degree education by taking a serious study of one-minute charts.
Obviously, my concern for the dollar is based on a recovery that isn’t happening. Did you see the piece written by James Altucher in Monday’s New York Post called “New York City is dead forever?” Here’s the Reader’s Digest version. He challenges the popular notion that New York City always bounces back. According to Mr. Altucher, “But NYC is the center of the financial universe, Opportunities will flourish here again. Not this time.” He goes on, “NYC has experienced worse. No, it hasn’t.” New York has been through two World Wars, the bad old 1970s when it was broke. It survived 9/11 and the financial crisis of 2008. But he makes the case this time its different. It is. New York and the rest of America has never been shut down for five months. New York is in deep trouble.
There is no plan to get rid of the Coronavirus. There is no economic plan to get the country back on its feet. The only thing we have is a Congress currently deadlocked in their feeble attempt to get another round of stimulus going while the Fed continues to print the dollars into oblivion. I’ve been showing you the Dollar chart for months, nothing has changed. What we are seeing is completely backed up by the symmetry of the patterns (see chart below).
As far as we are concerned, the markets likely keep rising until such time a new black swan emerges. The best way to approach financial markets is not as an investor, but as a trader. There are incredible trading opportunities every day. Your job is to renew your mind and learn how to get into a flow state with the market. But if you are going to be an investor, precious metals wouldn’t be a bad way to go.
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