XAU Short trade - playing the correction
Updated
Play the correction in XAU from the short side.
1. MACD divergence conforms to Elder's "breaking the back of the bull / bear (Trading For a Living ). Also both the MACD and the histogram confirms the divergence. Ideally I would have preferred a lower high on the MACD itself but this is good enough.
2. The ADX is declining which means this drop is a correction.
3. SELL at CURRENT SPOT 1524. TARGET is 1480. STOP at 1560.
4. If 1480 fails 1460 and then 1380, the previous major breakout.
There are other reasons like narrowing Bollinger band after expansion at 1440. Top of the band as well.
1. MACD divergence conforms to Elder's "breaking the back of the bull / bear (Trading For a Living ). Also both the MACD and the histogram confirms the divergence. Ideally I would have preferred a lower high on the MACD itself but this is good enough.
2. The ADX is declining which means this drop is a correction.
3. SELL at CURRENT SPOT 1524. TARGET is 1480. STOP at 1560.
4. If 1480 fails 1460 and then 1380, the previous major breakout.
There are other reasons like narrowing Bollinger band after expansion at 1440. Top of the band as well.
Note
UPDTAE - Since I published this, XAU is up 25 Dollars. It touched 1250 overnight. This trade could get stopped out but the 4 hourlies indicate a weakening momentum. Some have pointed out that a reverse H&S is in the making on the 4 hourlies. I wish to point out that H&S patters (as a general rule all reversal patterns) at the end of a move generally fail / morph into something else. The move in the 4 hourly pattern has some room left on the upside. If stopped out it is worth entering the short once again.Note
Typo above. UPDATENote
4 Sep 2019 - 1. I have purposely not gone into the technical of swapping out the spot position to a forward date as the idea was to demonstrate the trade set-up.
2. The short position is starting to look good.
Note
4 Sep 2019 - Re XAU short tradePlease ignore the above. That was meant for another trade. but the first point is valid.
As for this XAU short trade, I will keep the stop in place though it is a few Dollars away.
Note
6 Sep.Short trade still looking good.
Targets remain at 1480.
Note
10 SepWe are almost there. Target of 1480.
Note
11 Sep Spot XAU is 1491.68.It tries to break 1480 but could not get past 1485.
Lowering the stop to 1510 and profit target lowered from 1480 to 1460.
Note
13 Sep 2019Position closed at a small profit.
It was a volatile day - Draghi and Trump all contributing to the volatility.
Stopped out at 1510 on 12 Sep for a profit of 14 USD / oz. Swap costs not included as also trading costs.
At some point have to go long but not yet.
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