Double top formed near the ATH is breaking downBy March '23 gold did a strong breakout near the 2000 quote.
After that, the prices did not continue to flow and stucked inside a congestion at that level.
At 04 May '23 the prices tried to overpass the previous top but failed.
This failure gave us a doji candle, at the previous top, a very bearish signal, and besides that, it also gave us a double top formation.
The congestion kept going for some more days until a sequence of bearish candles appeared (16 to 18 May '23) breaking down the support of the previous bottom and confirming the double top formation.
As I have posted before here , I have started a long term position in gold, and I remain bullish in it. But the chart gave us these bearish signals that are too strong to be ignored, so I decided to hedge via futures contracts and started a short trade at the 1981.60. As the GC is a heavy contract for margin purposes, I'm actually trading the micro gold contract (MGC).
This price level is basically the same I did my entry at the spot through GLD, so my resulting position is currently neutral. That is, if prices fall, I profit in MGC and loss in GLD, on the same proportion; if prices go up, I profit in GLD and loss in MGC. And giving up this profit if it goes up, is my cost for this hedge.
If I stop the GLD I get short directional, otherwise, if I stop the MCG I get long.
