gold

Gold surges from 20 week trough

In my previous comments on Gold I had anticipated a 20 week trough forming and bouncing. I was early in the call and the bounce turned out to be only one of probably 20 day magnitude, occuring on  the 24th of February. In FLD trading strategy terms it was a ‘G’ category interaction which is followed by a ‘H’ category interaction to the downside, often quite sharply. Take a look at the most recent phasing below:

XAUUSD_£__daily_25_03_2015Having taken the long trade on the 24th my initial target was 1222, which was hit precisely and profit was taken. Subsequent to that though price moved down sharply. As a Hurst trader you must be alert to the possibility your phasing may be wrong and be prepared to reverse in the other direction if necessary. In this case I shorted below the trough of the 24th in anticipation of one final move down in a ‘H’ category interaction. The trade did not disappoint and armed with the knowledge this must be the final leg down before a bounce out of a 20 week trough Hurst traders would be looking to get long.

Price bottomed on the 17th of March and shot up the next day, creating a target of 1198. That target was hit today and should be exceeded in this ‘A’ category 20 day FLD interaction before falling back into the first 20 day cycle trough. After that there is a 40 day FLD target of 1232 (red box)  that should be achieved.

Silver is more bullish and moves in a similar cyclic pattern to gold. For good measure I have included the phasing I have below:

XAGUSD_£__daily_25_03_2015Silver hit its FLD target of 1616 on the 19th of March after a strong move up. It has now exceeded its target as expected given that this is the first 20 day cycle of a 20 week cycle.

For those that are wondering about the spike down on the 30th of November last year…I consider this fundamental interaction and NOT the 18 month trough. After comparing silver to gold and noting Hurst’s principle of commonality I concluded the 18 month trough did infact form on the 7th of November, similar to gold. The recent bounce has reinforced the view in my mind that this phasing is correct.

Leave a Reply

Your email address will not be published.