February gold futures on the Comex division of the New York Mercantile Exchange closed sharply lower and near the session low Monday, hit a fresh four-week low and saw a bearish downside “breakout” from a trading range on the daily chart.
Bearish “outside markets” – lower crude oil prices and a firmer U.S. dollar – applied pressure to the gold market Monday. These key outside markets will continue to have a major influence on the price of gold. This is another example of the importance of “intermarket analysis,” the focus of research pioneered by veteran trader/analyst and software developer Lou Mendelsohn.
Near-term chart damage has been inflicted in February gold. Bears’ next downside price objective is closing prices below psychological support at $800. Gold bulls’ next upside price objective is to produce a close above solid technical resistance at $860.
From an important intermarket analysis perspective provided by VantagePoint Intermarket Analysis Software, there are also bearish early technical clues to suggest more selling pressure in the near term.
Source: VantagePoint Intermarket Analysis Software
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VantagePoint is a valuable trading tool for which a trader can glean clues about potential near-term price trend changes or continuation of present trends. These near-term clues provided by VantagePoint can and do give a trader a key edge.
The VantagePoint daily bar chart for February gold futures shows a predicted medium-term crossover, a near-term bearish signal, as the predicted 4-day exponential moving average of typical prices two days ahead (blue line) has crossed below the actual 10-day simple moving average close (black line).
Also note on the daily chart for February gold that VantagePoint’s Predicted Neural Index is presently reading 0.00, also suggesting price pressure in the near term.
When the predicted simple three-day moving average value of typical prices is greater than today’s actual three-day moving average value, the Predicted Neural Index is “1.00,” indicating that the market is expected to move higher over the next two days. When the predicted simple three-day moving average value of typical prices is less than today’s actual three-day moving average value, the Predicted Neural Index is “0.00,” indicating the market is expected to move lower over the next two days.
