An Extensive Gold Breakdown

Alright so first things first on gold

The monthly timeframe suggests a few things to me as I can see that the ATH (all time high) has been broken AND Rejected

HOWEVER - We have over 23 days again before this monthly candle closes which means anything can occur between now and then end of the Month & by extension the end of the Year

The question I am continuously asking is why would gold go through all the stress of trying to get back to that previous high, to stop out sellers at the high and then sell - IN A BULL MARKET???

Is it that gold really wants to change its direction?

I doubt it as we know that gold is the "safe haven" asset for a lot of people - Losing faith in the dollar? Buy some gold, right?

If that is the case - Why would it make sense for gold to LOSE VALUE?

Sounds to me like that by itself is an induction to sell, The dealer knows traders would have been interested in sells at the ATH - So take them out and start fresh

Also Keep in mind we have NFP in a few days (Friday)

The current weekly candle doesn't add any new information from that of the monthly timeframe as it still has about 2 days + before it closes

HOWEVER, The previous weekly candle (black, bullish candle) does give us some information

I want to draw your attention to the way that that previous weekly candle closed - Do you realize that this is the first candle in a few years (3 years+) to have closed at the high rather than reject the high?

Surely that cannot be a coincidence - Especially as the gold market as we know is bullish.

The current weekly candle is somewhat confusing however as I am questioning what is the reason for the rejection to the high ?

The daily timeframe adds some more context as the last 2 days prior to this current day have both been bearish with the first big bearish day is also a bearish engulfing candle

This candle by it self would signal to traders who simply trust patterns and not ask a lot of questions to blindly sell without any thought given to why this may be visible

The next day suggesting that even more bearish momentum would be coming in - although that next bearish candle had wicks to both sides which I know to be a sign of consolidation on a lower timeframe

Why would the market consolidate now? NFP? No liquidity? Why knows - But our job is to ask the questions so that we can take inventory of multiple possibilities right?

The 4 hour timeframe is interesting to me because - I have drawn this zone (green)

And what this zone represents to me is the previous all time high not the current ATH

The previous ATH is important because We have to keep questioning why would the dealer trade gold below this zone if it is a bull market?

Who may feel inclined to trade below the previous ATH?
Could we trust buys at this point seeing as price has rejected both the previous ATH (currently) and the Current ATH formerly?

Again keeping in mind that NFP is on Friday - What if the dealer has the market stumbling below this level and will continue to do so to keep inducing both buyers and seller?

How would the dealer induce BOTH buyers and sellers by staying beneath the ATH?

Well think about it - as a seller price has rejected the previous ath and the current ath - Traders could look for the best possible sell at the highest point they can get in

AND

The dealer could be showing buyers buys by keeping price at a (low-ish) Low enough point to get buyers interested

What would be the dealer's reason for consolidating the market all of a sudden after such big drastic moves?

We Know that consolidation induces traders to buy and sell the extremes of the range itself - so guys who may be interested within this range? Everyone - Don't believe me? Scroll down and read lol

The market hasn't done much in the last 2 days yet traders still insist on placing trades heavily

If your strategy allows for it then cudos to you, I am happy for you...but if you are trading at this point in hopes that you are going to get the lowest possible buy or the next highest possible sell

I've probably got some bad news for you friend

This is an induction to get you to commit your money to the market

The way I See it there are two possibilities

Either
A. (Orange Line) Take out the buyers at the low of the consolidation range and then buy - Either for NFP or after

OR

B. (Purple line) Take out buyers at the low, sellers at the high of the range and the Previous ATH and then go back into consolidation

Option B will be to capture all lost liquidity within the market from Both sides as we know the dealer is inducing both parties at this time

I'd be honest however Option A is what I am most hoping for lol - This will give me an opportunity to place my buys and get into my next trade

All in all I have no choice but to continue to wait and observe what is happening

Follow me for more break downs like this if you like this style of breakdown - It is completely free :)

This is the last one I will post for the time being - This is my visualization of where I think both buyers and sellers are interested

By visualizing this we can have an idea as to where their stops might be

If we can think about where their stops might be - you can bet your last buck that the dealer KNOWS where the stops are.

Now answer this question for me

Do you think these sellers are safe at this point ?

What about buyers? Do you think they are safe at this point ?

Food for thought..

Like I said - follow me for more break downs of my thought process like this.

I don't always get it right but at least I am man enough to admit when I don't

Godspeed to all traders today :)