Friday’s rebound looked ever-so-slightly promising, since it followed a moderate selloff that did not quite achieve its ‘D’ target, 1064.00. Now, if bulls can push this erstwhile cinder block above the two peaks shown, it would generate an impulse leg with enough vigor, perhaps, to power a rally into week’s end. The burden of proof will remain on bulls nonetheless, and it should be noted that the last such impulse leg, in mid-June, sputtered out almost immediately, giving way to a $125 decline. Traders can position with a bid at 1090.90, but I’d suggest using ‘camouflage’ to initiate the trade rather than using a ‘mechanical’ entry, since the latter tactic would require a 4.50-point stop-loss. When trading gold futures, our goal with ‘camouflage’ is to pare theoretical risk at entry down to 0.40-0.70 per contract.
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