All Eyes on CVPOC
Gold futures [COMEX: GCJ15] rallied significantly in January from the 1168.30 lows to the 1308.80 highs in just three weeks. However, price was unable to maintain acceptance above 1300 and later pulled back to 1252.10 during the last week of the month.
Bulls defended the CLVN near 1250 and subsequently returned price to CVPOC at 1282.80, where price has remained offered each of the last three sessions. Bears are looking to keep value offered at 1282 for a shot at running downside sell stops through 1250 and into the next lowest HVN, which is 1210.50.
While bears have kept value offered at 1282, they have yet to influence selling pressure, which means bears are at risk of being squeezed, as buy stops are building above 1285s.
Double Inside Day
The daily timeframe shows Gold has formed a double Inside Day pattern, which occurs when price trades within the previous session’s range two days in a row. This is a fairly uncommon pattern, but typically has high odds of predicting impending expansion. Typically speaking this pattern can spark a move of 3 to 5 days in the direction of the break, so we’re going to watch the range closely for expansion soon.
Above 1285 likely begins to squeeze bears defending CVPOC at 1282, and the ensuing move could lead price to key targets at 1300.20, 1326.20, and 1343. Currently, bulls are defending prices in the CLVN at 1250 after turning prior resistance into support, which implies further strength ahead.
Again, the battle will be won and lost at CVPOC at 1282.80. Bears are locked and loaded at this zone, and if they don’t get paid we could see a big squeeze ahead. Failure to hold above 1265 will suggest bears remain in control, however, with a goal of running stops through 1250 support and into prior MCVPOC at 1210.50.
Cheers!
Frank Ochoa
Author, Secrets of a Pivot Boss
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