The Rounded Bottom of a Tower Pattern | The Gold Forecast

The Rounded Bottom of a Tower Pattern

June 22, 2017 - 5:44pm

 by Gary Wagner

Gold futures have settled with moderate gains on the day. The most active August contract closed at $1250.90, up approximately $5.10. This gain occurs immediately following two trading days in which the lows have been at the 200-day moving average, and their respective closing prices were below the 61.8% retracement.

As such, the last four days, as seen through the eyes of Japanese candlesticks, can be identified by two distinct candlestick patterns. Both patterns indicate support and a potential bottom concluding the recent price decline.

The first pattern is simply called “tweezer bottoms” and reflects the equal lows exhibited from the daily candles on the 20th and 21st of this month. According to Investopedia, “Tweezers are both a topping and bottoming pattern – patterns that indicate a shift in trend direction – although a broader context is usually needed to confirm the signal, since tweezers can occur frequently… A bottoming pattern occurs when the lows of two candlesticks occur at almost exactly the same level following a decline.”

The second pattern identified is a multi-candle pattern requiring a minimum of four candles, simply titled a “tower bottom.”  A tower bottom occurs at low price levels after a correction. At some point in the correction, typically when the market becomes oversold, a series of equal lows will emerge, creating a short-term bottom. This will be followed by a bullish candle, which will complete the tower. It is the formation of the long candles before and after the tweezer bottoms that resemble a tower structure. This corresponds loosely to Western technicians “V” reversal pattern.

Recently we have noted that the current correction in gold was reaching critical areas. How gold acted at these areas would define our models and expectations for the future price of gold. The two key technical studies we were focusing on were the Fibonacci retracement of the recent correction, as well as current pricing in reference to the 200-day moving average. Simply put, both prices together represent a technical “line in the sand,” so to speak.

The fact that gold prices traded to the 200-day moving average, but did not break below that is significant. The fact that gold prices opened just above the 61.8% retracement of the prior rally is also significant. More importantly, these two technical studies, when combined with candlestick patterns, have clearly indicated a high probability that gold prices have in fact found support and will move to higher ground from this price point.

Wishing you as always, good trading,

Gary S. Wagner - Executive Producer

This report is now free and publicly available to everyone

Gold Forecast: Proper Action

Yesterday I sent out a TRADE ALERT: Buy Gold @ Market . Current August 2017 Gold is at 1252.60. Place Stop Below  1235

Maintain Long Gold Position at 1252.60

Maintain Stop Below 1235

Closed trades:

GLD: On April 12th our stop was hit at $162. We went long at 162.82. Trade resulted in 0.82 loss per share.

Futures: Gold (GC J21) in at 1722.80. Out at at $1728 for a profit of $520.00- per Comex contract.
Forex: XAUUSD in at 1724.40. Out at at $1729 for a profit of $4.60- per ounce.
ETF's: GLD in at 161.55. Out at at $161.90 for a profit of $0.35- per share

SLV in at $24.24. Stop hit at $23.50, for a loss of $1.05 per share
May 2021 (SI K21) in at $26.26. Stop hit at $25.3 for a loss of $0.96 ounce
Forex silver in at $26.17. Stop hit at $25,30 or a loss of $0.87 per ounce

On February 18 we entered a long April Platinum trade. In at $1282. Our stop was hit today (02/26/21) @ at $1217.00
SILVER FUTURES MARCH: Entry at $27.36, and then closed the trade later @ $27.45.
XAGUSD: Entry at $27.26,, our stop was hit at $27.39

We closed our positions in SLV:
First leg SLV: @ 22.95 .out at @ $24.99
Second leg SLV @ 24.60. out at @ $24.99

On Thursday February 4 stops were hit on our long GLD ETF. We entered at 172.14. Our stop was hit at $168.29 (the open on Thursday) for a $3.85 loss per share.

GOLD FUTURES APRIL: Entry at 1845 - 1859 . Stop hit at 1813 - average loss $3900 per contract
XAUSUD: Entry at 1845 - 1857 . Stop hit at 1813 - average loss of $38 per oz
SILVER FUTURES MARCH: Entry at 25.42 - 25.46 . Stop hit at 24.11 - average loss $6650 per contract
XAGUSD: Entry at 25.33 - 25.40 - Stop hit at 24.11 - average loss $1.3 per oz
long February gold @ $1890.00 and stop hit @ $1902.20, for a profit of $1202.00 per contract
long Forex gold @ $1886.00 and stop hit @ $1898 for a profit of $12.00 per OZ
long March silver @ $26.31 and stop hit @ $26.41 for a profit of $500.00 per contract
long GLD @ $177.26 and stop hit @ $178.00 for a profit of $0.71 per share
long SLV @ $24.67 and stop hit @ 25.00 for a profit of $0.33 per share
long February Gold Futures at $1860-$1866 and stop hit at at $1869. Average profit $600 per contract
long XAUUSD at $1856-$1862 and stop hit at $1866. Average profit $6
long March Silver Futures at $25.16 - $25.25 and stop hit at $25.30. Average profit $450 per contract
long GLD @ $174.12 and stop hit at $175.78 for a profit of $1.66 per share
long GLD @ $174.12 and stop hit at $175.78 for a profit of $1.66 per share
long February Gold Futures at $1830 -$1843 and out at $1850 for a profit of $700 to $2000.00 per contract
long XAUUSD at $1841 and out at $1850 for a profit of $90.00 per mini 10 oz contract
long March Silver Futures at $24.29 and out @ $24.40 for a profit of $550.00 per comex contract
long GLD @ 1$71.50 and out @ $173.00 for a profit of $1.50 per share
long SLV @ $22.30 and out @ $22.50 for a profit of $0.20 per share
Long December gold at $1899. Stop hit at $1918, for a $1900 profit
Long forex gold at $1896.00. Stop hit at $1912, for a $1600 profit
Long December silver at $24.21. Stop hit at $25.07 for a $4300 profit
Long GLD at $180.46 and stop hit at $176.42 for a loss of $4.04 per share
Long SLV at $23.23 and stop at $22.78 for a loss of $0.40 per share
Long December Gold Futures at $1926 and stop hit at $1907.30 for a loss of $18.70 per ounce
Long Forex Gold at $1922 and stop hit at $1903 for a loss of $19.00 per ounce
Long December Silver Futures at $25.13 and stop hit at $24.73 for a loss of $0.40 per ounce
Long December gold at $1890, out at $1909.30 for a profit of $1,930.00
Long December silver at $23.95, out at $24.50 for a profit of $2,750.00
Long Forex gold at $1883.68, out $1907 for a profit of $23.32 per ounce
Long GLD ETF at $178.03, out at $179.80 for a profit of $1.77 per share
Long SLV ETF at $22.66, out at $22.03 for a loss of $0.63 per share

Gold Market Forecast

As you know over the last week and a half we have been looking at the real potential for the current correction to conclude.

As gold prices approached the 200 day moving average, it was critically important to see whether or not that price point would hold or not.

As such over the last few trading days we have seen technical confirmation of support and then in evening trading session here (morning session overseas), we noticed a uptick in gold pricing. That completed two candlestick patterns that typically are found during key reversals in the marketplace. That was the final requirement needed to trigger a by signal.

Today's video report will detail the patterns that unfolded as well as a rationale for our current stop placement. On tomorrow's show as well as next week we will begin to discuss are exit strategy.

Market Overview

Economic Calendar