News, analysis and commentary for gold traders and investors

"Be Right - Sit Tight"

Jesse Livermore
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Gold Market Wire

News, analysis and commentary for gold traders and investors

Gold Market Update

Gold Bounces off the Fib Level

December 1, 2020 - (Gold Market Wire) - Our decision to buy back the second third of our short at the 38.2% Fibonacci level yesterday worked out well. The chart (with comment) lays it out.

Waterfall Reversed Flow Right on the "Fib" level identified yesterday.

So, we stuck with the technicals and they worked out well. The waterfall slowed its flow and reversed. If your wildly bearish you could re-established the 1/3 shed yesterday and have a fairly comfortable position, with a lot of profit baked in. The problem, of course, is that the "waterfall" was the easy money. Now for the tough part....'what next'?

Well, to each his own, we like to say here. Holding on to the last 1/3 is certainly no bad place to be in a market this weak. And for those that appreciate the view from the sidelines at times like this, buy back the last 1/3 and join the observation committee. Right now we must be careful that a big bounce could ensue, but likewise, we must balance that against the fact that Gold looks in poor shape, to say the least. That August high is downright precipitous, and its hard not to view it a a marker of some significance. Could a serious high already have formed for Gold? Well, it looks possible... although there are no real guarantees in this game.

In the mid-term, that 50% Fib at $1670.48 is going to be critical, and we would not be surprised at all if we worked our way there. Gold likes to push people to near insanity, and so such a walk to the precipice can hardly be ruled out -it would, certainly, be in character.

(note: this is yesterday's chart)

In the short term, to avoid disaster, Gold needs to go on a tear above $1810 and stay there for the end of week close. That is a minimum to regain a bullish posture. Of course, some wild-eyed gamblers might like to catch the proverbial falling knife for a scalp and hope it doesn't cut. ... But that is really for gamblers only.

Let's see how New York opens.

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