- During the daily analysis of the commodity markets, I am particularly impressed by the gold market as we had initially fallen apart, only to turn around and show signs of life.
- The way that we bounced after a hotter than anticipated CPI number out of the United States is rather impressive, and it suggests that the market is going to continue to see plenty of buyers.
- It is also worth noting that the $2900 level of course is an area that will continue to offer a lot of interest, as it is a large, round, psychologically significant figure.
It is worth noting that the candlestick from the previous session on Tuesday was a shooting star, and if we end up forming a hammer during the trading session on Wednesday, that is a sign of confusion and uncertainty, as we continue to hang around a very important psychological figure. However, I do think that the one thing that you need to pay more attention to than anything else is the fact that the trend is still very bullish.
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Technical Analysis
The technical analysis for this is very positive overall, but the last couple of candlesticks suggests that the market is simply trying to figure out what to do next, and I think it is one that is a little overextended so it does make a certain amount of sense that we would go back and forth. Even if we do pull back from here, I think there are plenty of reasons underneath to start buying dips on signs of a bounce, with the $2800 level underneath being a bit of a floor. The $2800 level has been previous resistance, and now there should be a certain amount of “market memory” coming into the picture as traders like these large, round, psychologically significant figures. Furthermore, the 50 Day EMA sits right around the $2725 level and rising. This could of course offer a certain amount of support as well.
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