Below is a 2 year chart of gold futures (roughly 10x the price of GLD). Gold has no fundamentals, so it is one of the easiest assets to to analyze with charts. Charts are not just data points, they represent the sentiment of ALL investors at a point in time. The algos, AI, experts, general public, use the data points to make decisions balanced by judgement on the world’s economy, war’s etc., and currency debasement in the case of gold.
Gold has put in “bull flags” or “pennants” in a repeated cycle. Due to technology shortening time spans, everything in the market happens happens “faster” or over shorter time spans. Each pennant creates another bump in the volume profile and the overbought condition gets worked off through time, represented by the RSI panel at bottom of chart. This is “consolidation” at a new price range, exemplified by volatility in price.
So….the most likely pattern for gold is another pennant, consolidation, in this area (3,800 – 4,400). This could take as long as 4 – 6 months, but due to Trump could occur slower/faster, if sentiment feels debasement is slowing or accelerating. If you are considering adding to your gold position, when the price is near the bottom of the pennant is what you are looking for (preferably in the channel). As of the 10/24 gold has not dropped into the channel. It will be interesting to watch this play out.
This chart below is from 2024, when the 11 year Cup and Handle was very prominent. Gold blew through my price target as US debt and subsequent debasement became more concerning. GLD is used rather than /GC in this chart.
The Cup & Handle pattern is one of the most reliable patterns in technical analysis. It is used on all time frames from Minute to Monthly. Do not think of it as bars on a chart, it represents a psychological pattern in humans/nature much the same as Elliot Wave & Fibonacci patterns often used by analysts, that are derived from animals/plants/human nature.
Remember…… the Algos & AI have all these levels programmed in their code, and they do a lot of trading. When the computers note a pattern forming they will anticipate and participate as the only goal is to generate profit. Forces, both human and computer generated trading, reenforcing the pattern.
**Volume profile is reversed on this chart, just a visual difference.
*** /GC – gold futures, rollover quarterly, they are forward looking, so they are aways higher than GLD (GLD = Gold Futures ÷ 10) but converge as we reach the rollover date each quarter. Currently /GC is trading the December futures. So….when you hear discussion of “Gold futures hit 4,000” this correlates to GLD 400. Currently the futures are trading at about 250 point premium using futures, or 25 points on GLD since the price is for the end of December.
Apple
AAPL also has a Cup & Handle forming. From a purely technical view $AAPL could hit 300 if the general market is positive. AAPL is self reenforcing due to it’s prominence in the S&P. If $AAPL breaks out of this pattern it may drag the S&P with or vice versa.. If you search Google for “$AAPL Cup & Handle” >> images. You will find a few analysts noting the pattern. $AAPL is basically flat YTD so a break above the lip could garner a lot of sentiment/attention also supporting the S&P.
