Gold's Distribution Dilemma
Updated
It appears that the gold price is currently undergoing a distribution phase, indicating a potential decrease in price in the upcoming weeks. This phase is characterized by various elements observed in the chart, such as a series of buying climax (BC) followed by automatic rally (AR), secondary tests (ST), upthrusts, and fakeout actions. These patterns suggest that major investors, often referred to as "Big Hands," are manipulating the market to distribute their holdings.
1- Buying Climax (BC): Unlike in an accumulation phase where buying is dominant, BC marks the point where the stock stops rising and retraces slightly. It indicates a potential shift in market sentiment and the beginning of distribution.
2- Automatic Rally (AR): Following BC, there's an AR, but unlike in accumulation phases where it's an upward move, here it's typically a downward move, signaling distribution.
3- Secondary Test (ST): This move tests the strength of demand in the stock. It's designed to deceive retailers into thinking the stock still has strength, often accompanied by low volumes.
4- Upthrust: A move near BC to trick retailers into buying before a downturn.
5- Minor sign of weakness: A slight indication of weakness occurs when the stock declines significantly, even below the AR zone. To ensnare more retailers, a fakeout action is executed, misleading them into believing the stock remains robust. However, if the stock drops below the AR zone, it's deemed the initial indication of weakness.
6-Upthrust after distribution: Following the fakeout, many retailers will attempt to short the stock. However, the major investors have different intentions. They continue to increase the stock's value, possibly surpassing the previous upthrust. While this isn't always the case, if it occurs, it further confirms the distribution phase. Subsequently, the stock is swiftly pushed down without encountering significant obstacles, as the initial intentions behind the entire action are fulfilled.
7- Major Sign of Weakness: When the stock breaks below the range and faces resistance, indicating strong positioning against further price increases.
If I have personally bought gold at $1650, I may choose to reduce my exposure in the gold market by taking profits and wait for better prices for investment. Remember to exercise caution and implement appropriate risk management strategies when trading.
Happy investing !
1- Buying Climax (BC): Unlike in an accumulation phase where buying is dominant, BC marks the point where the stock stops rising and retraces slightly. It indicates a potential shift in market sentiment and the beginning of distribution.
2- Automatic Rally (AR): Following BC, there's an AR, but unlike in accumulation phases where it's an upward move, here it's typically a downward move, signaling distribution.
3- Secondary Test (ST): This move tests the strength of demand in the stock. It's designed to deceive retailers into thinking the stock still has strength, often accompanied by low volumes.
4- Upthrust: A move near BC to trick retailers into buying before a downturn.
5- Minor sign of weakness: A slight indication of weakness occurs when the stock declines significantly, even below the AR zone. To ensnare more retailers, a fakeout action is executed, misleading them into believing the stock remains robust. However, if the stock drops below the AR zone, it's deemed the initial indication of weakness.
6-Upthrust after distribution: Following the fakeout, many retailers will attempt to short the stock. However, the major investors have different intentions. They continue to increase the stock's value, possibly surpassing the previous upthrust. While this isn't always the case, if it occurs, it further confirms the distribution phase. Subsequently, the stock is swiftly pushed down without encountering significant obstacles, as the initial intentions behind the entire action are fulfilled.
7- Major Sign of Weakness: When the stock breaks below the range and faces resistance, indicating strong positioning against further price increases.
If I have personally bought gold at $1650, I may choose to reduce my exposure in the gold market by taking profits and wait for better prices for investment. Remember to exercise caution and implement appropriate risk management strategies when trading.
Happy investing !
Trade active
This wasn't a good prediction even If the analysis was correct.
I didn't make money but also I didn't loose. I ve chosen to go to other markets at the time and I don't regret it.
Of course I am not bigger than the gold market ;)
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