Failure to close over $1,842-45 last week is keeping the gold bears in charge for the short term. We had suggested that another move to $1,880 could be in the cards; that holds true should bulls wrestle control away with a close over the 200-day moving average ($1,843). Again, bulls should be cautious of strong overhead resistance in the $1,880 area.
We suggested that a very short-term bounce in stocks was looking likely. The below chart shows the S&P trying to find support at the bottom trendline with resistance at the top trendline coinciding with its’s 50-day moving average (orange). Traders may consider taking a long position at support with the intent to sell resistance.
Note that the S&P 200-week moving average (blue) lies just below the bottom trendline offering another level of support.
Traders looking to scale into positions with the goal of catching what may become a significant bear market rally may consider using the two levels of support identified above as markers for setting risk/reward parameters.
