Every time I look at the markets I am always aware of how the like a maze. If you ever examined a maze you’ll know that there are many paths that you can take and each one will bring you to somewhere new. If you go left at an intersection it may lead you to the far east portion of the maze and if you go right, the far west. One thing is clear though is that depending on the path you take it will lead you on a path to a different location.
When I look at the charts I have to recognize that there are many paths that price may take. Knowing where the price wants to eventually go is the key to being able to determine the
path price will take but in many circumstances we can’t know for certain where the destination will be. In these cases we resort to examining the path that price is taking to determine where price will eventually go.
We now have a situation in the markets where we are applying this exact concept to be able to determine the eventual destination of price.
Recently we have been watching GOLD and watching to see if the Banks would create structures indicative of them eventually move price higher but they never ended up do this. This started to lead us to suspect that they were instead going to drop price. We have been patiently waiting for signals to present themselves for longer term direction and in the
meantime taking advantage of shorter term moves with portfolio positions. They have done well and we are mostly sitting on the sidelines now in wait to see what the banks will do next.
There are big moves being planned right now, they are preparing for some big momentum, we can see the build-up, we can see the paths that price is taking and it leads us to suspect that these moves will be taking place soon. This past week played a critical role in what I believe is coming. It is too early to tell but I will be watching the markets closely to see if what I suspect will happen… will!
Kevin Araujo