Gold Monthly Chart Outlook.

Shiny metal Gold leaning against a major resistance line and has been in that position for the last 4 months now.

What is on hand here even though it has not been able to stage a major breakout ? Think about Dow Theory Intermediate term trend and how it is defined on the chart. I have highlighted that  section in the rising channel.  Rising Peaks and Throughs is what we call it = A change. I would not call this behaviour “higher highs” and “higher lows” for the simple reason that higher highs and higher lows represent the short term trend which each individual bar/bars represent. A common mistake amongst some practitioners of TA to date which may be worth noting. 

To the point of what matters now. How do we read the last 4 bars almost all being inside and outside bars and leaning against a major resistance ?

Mr Wyckoff called this behaviour “Bag Holding”. It is where the smart money/ better informed are tiring the short seller/weak holder by clearing any excessive supply prior a major breakout before their mark up campaign. If on hand ( breakout), it will be massive for the simple reason that this congested price action behaviour has been in effect for a considerable period of time. A massive/gigantic cause has been built within. Effect (eruption of the volcano/major breakout) would therefore be massive which is likely to be sharp and decisive and a meaningful one of course.

Summary: We are in the late stages of a long term accumulation until proven otherwise. Observing the potential trap that short seller/bear is getting into.

Another important point which I want to make is that, this is a long term analysis. In the weekly as well as daily lots of swings and round abouts within.

Chart is courtesy of tradingview.com

goldmonthly12042018

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