I’m starting to see cracks in the reverse head/shoulder pattern that I highlighted a few weeks ago. For starters, the right shoulder is taking a little to long to form and it appears that it’s breaking down, which would invalidate the pattern immediately. It also appears that the RSI is about to break to the downside out of a wedge formation, and cross down through the all important 50 level at the same time.
On a daily chart, the miners have many distribution days over the past few weeks. The ADX is very low and appears it’s about to start a major trend, and given that the -D1 is on top, down seems the likely direction. Also, take a look at the MACD and compare where it’s at today, verses where it was at in late July. Almost identical price levels, and yet the MACD is heading in different directions (as indicated by arrows). This could be the divergence implying the next big move in gold is down.
