I wrote about a great PEMA sell signal in Barrick Gold Corp. ($ABX) on July 23, which worked out perfectly. This time, however, I head straight for the source, as Gold futures looks poised to head lower over the next three to four days.
PEMA Pull-Back
The Gold futures contract (GC..) trended steadily higher in the months prior to July, when a bearish PEMA Crossover helped identify a potential change in trend.
The commodity is now testing the multiple pivot-based moving averages from underneath during a short term downtrend, which offers a perfect “sell the rip” opportunity.
The first part of the setup is in place, but we now need close price confirmation. A close below yesterday’s low price of 1,176.70 will confirm a short entry in this commodity, with targets set to S1 support at 1,144.75.
We’ve already seen this commodity demonstrate this setup over the last two weeks perfectly…one more time won’t hurt.
If you want to read more about PEMA Setups and Tactics, CLICK HERE.
Two-Month Lower Value Relationship
The Central Pivot Ranges for the last few months are revealed in the daily chart below.
Notice during a bullish trend, every pull-back to the pivot range offers a great “buy the dip” opportunity. This behavior will usually hold up as long as price remains within the existing trend.
However, Gold broke the bullish trend in July and closed significantly lower for the month, creating the first Lower Value relationship in months.
We are now seeing a test at the August pivot range from underneath, which offers a selling opportunity.
The fact that this setup coincides with the PEMA sell signal creates a nice form of confirmation.
Again, a close below yesterday’s low price of 1,176.70 will confirm a short entry in this commodity. Look for price to drop back toward S1 support at 1,144.75.
For an introduction to the pivot range, CLICK HERE.
Let’s see what happens!
Cheers!
Frank Ochoa
PivotBoss.com
Follow Frank on Twitter: http://twitter.com/PivotBoss
The easiest way to sell it is at your local jewellery shop. They will melt the coin to inspect it for purity. Ask for a receipt when accepting payment. Details of weight & price will be listed there.