Yesterday's market outlook was clear, advocating for a comprehensive bearish stance below $4120 and suggesting direct short entries around $4090. In the afternoon session, the price rebounded to the $4097 area, providing the suggested entry point. Those who executed or followed the daily commentary recommendations have already reaped substantial gains. During the evening session, as prices bounced higher, the suggested short entry was at $4040, using the earlier session low and the top of the hourly bearish candle at $4048 as resistance to initiate shorts, which led to another significant decline. A further short entry at $4015 was also provided, with the price falling as anticipated.
Three short trades throughout the day generated substantial profits. As mentioned, a comprehensive bearish approach is key. In a weak market, feeble rebounds serve as the most direct entry signals. Even with a slightly less optimal entry point, as long as the direction is correct, opportunities to break even or profit will arise. This is the appeal of following the trend—its significance lies not only in profitability but also in capital preservation.
Getting straight to the point, in a bearish trend, corrective rebounds present opportunities to short. The weaker the rebound, the weaker the underlying trend, and the higher the stability and continuity of the prevailing direction. It is advisable to focus on key support-turned-resistance levels and the opening decline areas on the hourly chart (or the top regions of significant bearish candles). Approaching these levels on a rebound is an opportunity to short. After a new low is breached, even a slight bounce should be viewed as a chance to re-enter short positions, anticipating further downside momentum.
Yesterday, following the significant decline during the US session, gold's corrective rebound peaked around $4022, encountering resistance near the low from two weeks prior and subsequently retreating. The overnight rebound high was at $4018, reinforcing the clear resistance around the $4022 zone. Therefore, today's strategy involves continuing to short below the $4022 resistance. The intraday plan is to short on a rebound approaching the $4022 area. If the price fails to rebound to this planned resistance level, then the $4018/24 zone should serve as the defensive boundary for initiating shorts. In a weak market, one should not anticipate significantly higher entry levels; lower levels indicate a stronger trend. An aggressive short position can be considered below $4000, using minor highs as a basis, targeting new lows. The downward trend remains intact, with further room for decline. After breaching the previous low of $3959, minor rebounds should be treated as opportunities to re-enter short positions.
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