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PHLX Gold/Silver Index (XAU) - Knee Jerk High »» Weekly Summary Analysis
By: Marty Armstrong | October 17, 2020

While the historical perspective of the of this market included a decline from the major high established back in 2010 moving into a major low in 2016, the market has bounced back for the last 4 years. The last Yearly Reversal to be elected was a Bearish at the close of 2019. However, where there were 2 reversals elected, there was also a Super Position which took place with 1 Bullish Reversal elected warning that this immediate signal has been suppressed by the opposite force warning we may not see immediate follow through.

Focusing on our perspective using the indicating ranges on the Daily level in the Gold & Silver Cash Index, this market remains neutral with resistance standing at 14838 and support forming below at 14703. The market is trading closer to the support level at this time. An opening above this level in the next session will imply a decline is unfolding.

On the weekly level, the last important low was established the week of September 21st at 13418, which was down 7 weeks from the high made back during the week of August 3rd. We have been generally trading up for the past 3 weeks from the low of the week of September 21st, which has been a move of .1205%.

Interestingly, the S&P 500 Day Futures has been in a bullish phase for the past 6 months since the low established back in March.

Critical support still underlies this market at 9071 and a break of that level on a monthly closing basis would warn that a sustainable decline ahead becomes possible. Immediately, the market is trading within last month's trading range in a neutral position.

The Gold & Silver Cash Index opened within last year's trading range which was 10825 to 6585. Right now, the market is still trading above last year's high while we have an outside reversal this year with the last print at 14709. The last time such a similar pattern took place was 2016. Nonetheless, the market is still trading above the opening print for the year which was at 10786. As long as this market remains trading above 11404 yet above the opening print on a closing basis, then a year-end closing in this posture will warn that we could have a knee-jerk low in place this year.

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