from Jesse’s Café Américain:
There is an inverse head and shoulder bottom forming up in gold, and even on the weekly silver chart now.
I have taken the liberty of putting some preliminary marks on the chart to show my current thinking of how it may shape up. If the formation does not continue to evolve I may change or remove them. But I thought now was the time to share my preliminary thinking from my own ‘shadow chart.’
While the 100 DMA was taken out today in gold, I do not think it is all that predictive or important, except that a few traders may favor it as an indicator. There are much more powerful technical indicators at work now.
What I have labeled ‘neck 1’ on the gold chart at 1420 is much more important, because it not only marks the first tentative neckline of the inverse head and shoulders, but it also marks the breakout point from the short term uptrending channel in which gold finds itself now. Not to mention that it also breaks the intermediate downtrend. I have included a ‘closeup’ of this chart area for your convenience.
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