Upgrade Gold to 1195

Rumor says China to raise RMB NEXT WEEK. USD will go down, commodities will go up.
Only problem is the rumor on interest hike. Me thinks it will not happen until late May. We still have time.

To be conservative, I may watch my stop carefully. If GC can close above 1162, I will chase more. Otherwise, it may retest 1120 support.  Anyway this will be a 40 points wave. I am so excited.

I don't disbelieve it

Gold is stronger than I thought again. I exit too earlier and missed about 20 points. Busy is not a good excuse. It is actually my bad judgment. I thought it could not pass 1130 which was the 3/16 high. Not to mention multiple MA, 50% since 1226 and 61.8% of this round all in 1140 neighborhood. Gold end up took the March high and is challenging 2010 high now.

Anyway the breakout need to be respected. I think 1175 is a good number as Andrew (purple), channel (orange) and fib all meet there. Should I take the trade? Yes I think so. The breakout is powerful, but the internal needs some work. 1155 is Jan high and 1160 is 61.8% (blue). With overbought condition like this, I don't think crazy bulls will push it thru. I expect GC stays in the range of 1135-1155 for a while. Any dip below will be a buy. Time series clearly says 4/16 top. It worked perfectly since last Oct. It should work this time as well. 

Dreamed plan: buy dip around 1135 friday, sell 1175 within 1 week.

Will the Wave5 of USD play out

$$$ is at critical point. If the reg channel holds, we may see a wave 5 up, otherwise everything else will be at large, Gold, ES, Oil, you name it.

The Fed "exit" policy may be implemented in the order: 
- first, pull out short-term liquidity tools, such as stop buy back of mbs; 
- further increase the discount rate, which is in rumor now; 
- after raise bank reserve, the famous Chinese way, (Are we Chinese now? Yes we are Chimerican now. Will this strategy work in the US? I doubt);
- last raise interest rate.  

Plan for this week

That's it

Review on USD

PGS of the flying pigs are in trouble. $ got boost.
$dxy completed a break-out then pull back pattern. now 76 could be a support. it might go to 76.8

The key line is at 77.69. Before we get there, I will still call it a correction, but rather an impulsive.

Interesting Chart Comparison

On Nov 27, Gold opened at 1194, then moved up a little bit and recorded a new history high at 1197. Upon the Dubai news, Gold dived to 1138.4, then end up managed to close at 1179, leaving a shadow of more than 40 points.  It is a strange pattern, 60 point candle with 20 point body and 40 point shadow. How is the market going to interpret the strange candle?

Reading:

1. The dip on 11/27 measured 61.8% of the rally started from 1100 level, then hit 1197.

2. Gold resumed rally and marked a new history high at 1227.5 4 days later on 12/2.

3. Crashed since 12/2.

Gold Chart:

With help from my Chinaman, I noted similar situation happened in Shanghai before.

1. SSEC started from the previous swing low at 3060 and peaked at 3450 on 7/29. Then on 7/29 after made a new high, the index dip to 3215, which is also 61.8%.

2. Rally resumed and marked a new high 4 trading days later to 3485 on 8/4.

3. SSEC made significant retracement since then to 2640, which is 50% of a larger pattern, and spent 3 months consolidation.

Guestimation:

Gold will follow SSEC to go down for the next 3 months, first struggle around 38% at 1105 then find support at 50% retracement at 1065 level.