Interesting Intraday Rounded Reversal In Gold

I wanted to do a quick update post to show the “Rounded Reversal” pattern that formed recently on the intraday charts in GLD (Gold Tracking ETF).  Let’s see it on the 15-min frame.

Price began making new swing lows following a price lurch to the downside which created a new momentum low early on September 24th.  This hinted that - according to the Momentum Principle - a lower low in price was yet to come in the future.

It did later in the day, and then a new low formed the next morning on the 25th.  However, by this time, the price swings had narrowed and the 3/10 Momentum Oscillator showed a distinct positive momentum divergence on the $96.80 price lows - this hinted that odds of downside action were reduced.

Price still remained beneath the 20 period EMA until the morning of September 28th, when we initially breached above this level and above the 50 EMA.

Price then formed a “mirror image” foldback (price on the right side of the swing up resembled the left side of the swing) which completed the “Rounded Reversal” price pattern that we’re seeing currently.

Today’s session has brought on a new swing high (over the September 28th high) and more importantly, a new momentum high which hints that higher prices are likely yet to come.

If the pattern is truly a “Mirror Image Foldback,” then we would expect an upside move from here to ‘mirror’ the left side of the chart (but perhaps not as fast up as it was down - markets often fall faster than they rise) and formally complete the Rounded Reversal pattern.

Something to watch for sure.

Subscribe by RSS Subscribe by Email