Gold Crashes to Support in Perfect Rounded Arc Pattern

May 3, 2017: 11:48 AM CST

The “Rounded Arc” Reversal Pattern is one of my favorite trading opportunities when it appears.

Why?  Let’s take a look at Gold and note the ideal symmetry and forecasting aspect of this key reversal pattern:

Gold established a base at the $1,250 level and then broke higher through April toward our $1,300 target.

From there, negative divergences and a big increase in sell (bearish) volume set the stage for an intraday reversal.

That’s exactly what happened as momentum burst to new indicator lows and price began a new downtrend.

Our operating target was once again the $1,250 level and price achieved it today after completing a powerful Rounded Arc Reversal Pattern.

It’s my favorite because it gives a clear target – the prior low – and the right side of the chart (the side you’re trading) resembles the left side of the chart (that “built” the pattern).

The goal is to hold confidently on a breakdown (in this case, beneath $1,280) toward the target or (as is my preference) limit your risk by trading more actively in the sell-swing phase (right side of the pattern in development).

You can trade either breakdown/breakout setups or classic retracement opportunities that develop along the pathway “down away from” $1,300 “toward” $1,250.

With the pattern complete, be on guard for a short-term reversal here or else a surprise acceleration beneath $1,250.

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Corey Rosenbloom, CMT

Afraid to Trade.com

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2 Comments

2 Responses to “Gold Crashes to Support in Perfect Rounded Arc Pattern”

  1. The "Rounded Arc" Reversal Pattern - TradingGods.net Says:

    […] By Corey Rosenbloom […]

  2. The Commodity Crush Continues Lower May 4 | Afraid to Trade.com Blog Says:

    […] we highlighted the “Rounded Arc Reversal Pattern in Gold” for an educational […]