On a pure technical basis, a support and bullish reversal potential event has shaped up. The predictive/forecasting model overlay also points to an early bullish reversal signal pending confirmation.
At this point, IF support holds at defined trendline, THEN I would expect a rallying and consolidation into the overhead forecast target: TG-1 = 21.724 - 03 JUL 2014.
Independent of the technical and predictive model consideration, my personal bias remains influence by the XAU:XAG relative strength chart released earlier this year - See chart with its replay feature here: tradingview.com/v/w6G3CwDJ/ or as a static image here: . Note how well the KoD played out in this one.
OVERALL: A technically-driven bias defines potential support at the current level, with nearby bullish target at 21.724 acting as potential resistance. A relative strength chart adds further bearish weigh against the white metal (see "Link To Related Idea) - Based on these conflicting perceptions, I will leave the directional indicator to NEUTRAL until both technical and predictive views come into alignment.
Cheers,
David Alcindor Predictive Analysis & Forecasting Denver, CO USA
Hello @NF414 - Model remains biased to the upside. One candle will not trigger a directional change in the model, as it analyzes a directional consensus that depends on a critical mass of participants. So far, that directional reversal condition has not been met, despite this single daily candle decline.
Independent from the model itself and as a human, thinking trader living in the midst of these world events, I would expect commodities such as gold, silver and other metals to fall. But then again, this is just me thinking "outside of the model", and every time I trade against my model, I am proven wrong more often than right - This could be one of the times when shorting this metal would be the right thing to do, but the model is the plan, and my rule is simple:
"Plan the trade, then trade the plan".
Again, the odds are against me when thinking up a trade against the model, yet there is a good chance that the human side of me will prove the model wrong. But that is too costly for me to find out every time I feel different - I let the shallow stop-losses prove me right or wrong, as they too are planned in the trade, then traded in the plan.
David
NF414
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Please elaborate on your "model as an analysis of a directional consensus that depends on a critical mass of participants". What exact circumstances in chart or fundamentals makes that model "biased to the upside" right now?
4xForecaster
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@NF414 - Although I can't reveal the elements of the model, it can simply say that I use the model to define all aspects of the price action needed to carry out a full trade: Entry, stop-loss, take-profit levels. The model also alerts against any early market reversals and provides a confirmatory signal in market reversal. In addition, I use it to define a range of targets, typically defined as primary and secondary (named TG-1, TG-2, ... ect), as well as low-probability extreme targets where if reached (at an extreme high or low level) would also define a high-probability reversal at that low (TG-Lo) or high (TG-Hi).
The model assumes values that represent a consensus for a direction (up, down or sideways). Given a particular line behavior, the value will indicate whether the market will continue towards a direction, reverse or even aim for a particular target value.
Based on the strength of that line behavior, a low/middle/high value is defined.
All these behaviors are not occurring within the price field. However, their interpretations have a very well defined dollar/currency pair value within the price field.
That is pretty much all that I can reveal, as cryptic as it might seem.