Author Archive: Scott Pluschau

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Weekend Update: Gold Breakout

Weekend Update: Gold Breakout

Gold made a breakout from a significant multipoint triangle consolidation pattern, see right hand chart below.   The main focus for me going into next week is on long trade setups in GC in the smaller degree timeframe as long as we are above the breakout area.  The pressure next week should be on the bears. What is important to mention is that I do not have any plan to put on an intermediate term trade until the major upper trendline of the dominant “descending triangle” pattern has been taken out with authority. I have no issues paying up in order to increase my probabilities for longer term success. In the near term, […]

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Breakout in Gold

Breakout in Gold

Those who may have to unwind a losing leveraged short position are in a really bad spot. There is not enough volume to confirm a breakout, but Comex hasn’t opened yet. This is a significant multipoint trendline and the Bears have a herculean task ahead of them to reverse this near term change in trend, especially if the volume picks up as price moves higher.   I believe the most probable area of next resistance is around the $1650, which is both a prior “high volume node”, and also where it would intercept a major descending trendline in the bigger picture.   My most previous post on gold and a view of the bigger picture trendline can be found […]

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Silver is looking over the edge…

Silver is looking over the edge…

Silver is looking over the edge of what looks like the “Grand Canyon” on the 1 year daily chart, see right hand side below. I have highlighted the past three month price action on the daily chart, see left hand side below.  In the near term these trendlines in the recent price action are key reference areas for me. Should the lower “minor” trendline support break on that 3 month chart, the big deal will then become the $26 horizontal price level or MAJOR SUPPORT. I am a strong believer in precious metals as money, savings, and an insurance vehicle, and I have also been looking to buy for the intermediate and long term, this […]

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Complex “Head and Shoulders” a “Cup with a handle” on Dollar Index and the Gold Triangle

Complex “Head and Shoulders” a “Cup with a handle” on Dollar Index and the Gold Triangle

Interesting topping pattern on the Dollar Index in the near term 30 minute chart, see left hand side chart below.  This is a complex bearish “Head and Shoulders” reversal pattern.  All of the right shoulders off the head have held their stop losses so far. The big issue is really the Weekly chart, see right hand side below.  There is a very bullish “Cup with a Handle” pattern.  Weekly charts are “numero uno” when it comes to understanding order flow from the larger degree timeframe traders.  Since the breakout there has been a few profit taking “Throwbacks” to the breakout area.  This cup with a handle is the dominant pattern and should […]

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Gold once again reacts at critical trendline

Gold once again reacts at critical trendline

One of the great futures battles between the bulls and the bears is taking place in gold futures recently.  The daily chart right hand side below has once again seen gold react at an important multipoint trendline.  This is now “significant” trendline support.  It won’t be long before the upper or lower trendline is faced with another test. The chart is what I would refer to as “ripe” for an “Initiative” type move into “Vertical development” or a market that has potential to be in “Imbalance”.  A market that is in imbalance is a market that does not have enough offers or bids to meet large orders that come in “at […]

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Gold is coming to a fork in the road…

Gold is coming to a fork in the road…

The multipoint trendline resistance that I have touched on in the recent posts on the blog has indeed been “concrete”.  Gold has also been making higher highs at the same time, and the pattern is pinching to a point where one side of supply or demand is likely to run the other over.  There is no way to predict which way it goes.  I only care about positioning myself on the winning side, or with the strong hands of the current “Open Interest” once gold enters the next phase of “vertical development”. The picture of the daily chart, right hand side below, is one of “extreme tension”.  Any swing/position trade, long or short, being placed inside this pattern is […]

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Gold once again approaching a major multipoint trendline

Gold once again approaching a major multipoint trendline

I’m going to keep this brief.  Let’s see if gold can breakout to the upside of this major multipoint trendline on the daily chart with some volume.  I am looking forward to what could be many great trading opportunities on the long side of the gold contract as it has been what seems like an eternity to buy gold with any conviction. It is important to note that I am not prepared to hold any trades in gold for the intermediate term yet.  I don’t care if I pay two hundred dollars more an ounce at that future point in time, my primary concern is probabilities compared to the reward to risk, and […]

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Silver is not out of the woods yet….but

Silver is not out of the woods yet….but

On the 30 minute chart yesterday silver had a textbook breakout from a consolidating “Symmetrical Triangle” near MAJOR support.  The 30 minute chart is now displaying a “Bull Flag” continuation pattern.  I was preparing for a breakdown from the triangle to put on a trade to the short side, and yet wound up waving goodbye to the upside breakout.  The follow through on a breakdown of the triangle, would have had massive reward to risk. Why didn’t I take the breakout to the upside?  I didn’t feel there was a “positive expectancy” due to the structure of the daily chart.  Sometimes trades with a “negative expectancy” work out (worst thing that can happen to […]

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Silver is approaching MAJOR support

Silver is approaching MAJOR support

I have received requests for commentary on silver.  The pattern in silver is very similar to gold.  There is a baleful “Descending Triangle”.  Below is a weekly chart of silver.  Weekly charts in my opinion are the “Ace of Spades” in charting, meaning nothing over rules them, not even the monthly chart. I would like to load up on some silver eagles/maple leafs, so a breakdown and follow through in the triangle will be welcomed by me.  I also have no issues shorting silver in the smaller degree timeframes to pay for those eagles/leafs upon this development.  Right now we are approaching MAJOR support. Would it be a better idea to pay attention to the […]

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Follow up on Gold II : Risk Management

Follow up on Gold II : Risk Management

When the bearish “Rounding Top” formation completed, we could do one of three things. 1.  Get out of the way and wait for a new bullish pattern to develop 2.  Liquidate a long position (Risk Management) 3.  Go short I do not have a 4th option to check the status of OTC markets; or 5th option to check on what the “experts” have to say/predict. Do you have a trade plan for what current developments are taking place in the auction right now? The prior post discusses how I could intuitively see the current pattern before it completed.  I do not trade early in anticipation.  Preparation is for reacting at the execution stage with precision.  Preparation is for “peace […]

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Follow up chart on Gold (Trade Management)

Follow up chart on Gold (Trade Management)

There are comments from me at the very bottom of the prior post that should be reviewed in this section. Basically what I said there was that this is a perfect example of why it doesn’t pay to be early in anticipation of breakouts.  Notice the grey trendline that failed on the 30 minute chart at the major multipoint trendline resistance.  There is a great lesson in “Trade Management” here. One thing that the 30 minute chart is starting to resemble is a bearish “Rounding Top” formation.  It hasn’t rolled over all the way, but I can intuitively see it as a development to keep an eye on. However the blue […]

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Follow up on Gold Chart

Follow up on Gold Chart

This chart is a follow up to the comments made on the prior post here. “Head and Shoulders” and “Bear Pennant” drawings have been included on the left hand side 30 minute chart.  “Descending Triangle” on the daily right hand side is quite menacing. It continues to amaze me how prior supply or demand gets shut off when targets get reached.  This is a great example of why I take my profits and move on (as well as take my losses and move on). If you took the profit on the H&S, you can re-enter on the Pennant for further follow through.  When you exit the Pennant it then becomes a matter of again objectively identifying market […]

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Update chart on gold price

Update chart on gold price

This post is in response to a question from reader Trystan on the flag continuation pattern post here : 1.  Bull flag had a breakout on “weak” volume. 2.  There has now been a normal throwback to the breakout area due to the weak volume breakout. 3.  A rising trendline has been tested allowing a stop to be trailed AFTER the reaction in order to reduce the risk in lieu of a weak volume breakout. 4.  A failure to take out the recent high near 1643 could also form a potential bearish “Head and Shoulders”, but it is very early, there is no H&S or bearish play here.  (My mind has seen patterns […]

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Continuation Pattern developing on Gold

Continuation Pattern developing on Gold

The 30 minute chart is shaping up to a “Bull Flag” pattern.  There is no confirmation of the pattern yet, which would be a breakout or liftoff from the top trendline in the flag on an increase in volume.  Trading early in anticipation of breakouts is a mistake in my book.  I would prefer to see liftoff from the flag during the Comex session.  The target or “Measured Rule” of a bull flag is the length of the flag pole/mast added onto the breakout point which would be approximately 80 points which puts gold back in the $1,700 per ounce level and it would also put gold near resistance of the downward sloping trendline of the […]

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