Comex Gold Futures (GC) Technical Analysis – October 9, 2014 Forecast
December Comex Gold futures rallied on Wednesday, but the market ran into sellers at a long-term downtrending angle and shortly after it crossed a minor top. The two-days of higher-highs also made 1183.30 a new main bottom. This was the first main bottom formed since $1281.00 on August 1. In addition, the rally from $1183.30 to $1224.50 also marked a $41.20 rally over a two day span. Both of these events could be signs of bottoming action and are definitely signs that someone is taking profits at current price levels.
Let’s start with support first today. The main trend is down on the daily chart. The short-term range is $1183.30 to $1224.50. Its pivot price is $1203.90. This price is controlling the short-term direction of the market. Holding above it could launch another strong surge to the upside.
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The first uptrending angle to watch comes in at $1207.30. This is followed by angles at $1195.30 and $1189.30. The close at $1206.00 means the market may open a little weak, but overcoming $1207.30 later in the session will be a sign of short-covering or aggressive counter-trend buying.
If traders can hold the market above the steep angle at $1207.30 and the pivot at $1203.90 then enough upside momentum may be created to trigger a rally into the angle which stopped the rally on Wednesday at $1219.50 today. A sustained move through this angle could trigger a fast rally into the next major angle at $1238.30. The market could accelerate into this angle because buy stops may be triggered above the minor tops at $1224.50, $1232.70 and $1237.00.
The daily chart opens up over the last angle at $1238.30. Based on the main range of $1324.30 to $1183.30, the next upside target would be the retracement zone at $1253.80 to $1270.40. Finally, a pair of long-term downtrending angles at $1281.30 and $1283.50 would be the last target.
On the downside, a failure at $1183.30 will mean that the shorts have regained control and are set on taking this market lower. There is no visible support under the current bottom until about $1100.00.
The tone of the market today will be determined by trader reaction to the pivot at $1203.90.