Outstanding technical setups for today in Gold and ES

Gold we have a retest after a potential low on a pullback. This is one of the strongest edges in trading, and I don’t actually know why I never built a daily chart system around it.

Certainly anyone going through the System Building Masterclass should seriously consider it.

The idea is this. We know that buying pullbacks in an uptrend is a strong edge. People like good things, when they are on sale. Gold in an uptrend is a “good thing” and a pullback is a “30% off sale”.

Buy buying on a pullback is fraught with danger, since we don’t know how far the pullback is going to go. Some people might buy on a 38% fib pullback, but then it could keep going all the way to 61% (or more) and they would have to endure some painful punches in the groin.

Alternatively you might buy on a pullback to the 20 EMA but see it continue falling to the 50 EMA.

In the short term, buying on a pullback can feel a bit like catching a falling knife. The solution is obvious. Wait until the knife has stuck in the ground, since that provides a lower risk place for entry.

The completed retest pattern tells us that the cycle of lower lows and lower highs that marks a pullback is over.

And therefore it is safer to get long.

The circles mark previous recent instances.

The other fascinating setup for today is the Retest Variation Sell from the Price Action Masterclass in the S&P 500.

This is a lovely setup, and it should provide a powerful clue as to what is happening. If it fails, it throws the whole bearish thesis in doubt.

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