Yesterday’s dive did more damage than the daily weakness to which we long ago became accustomed. Notice that it breached two ‘external’ lows (labeled in the chart). This implies that even though August Gold was down by just a few dollars yesterday, the selling is more urgent than it might appear. If this reading of gold’s vital signs is correct, we should see the pattern shown exceed its ‘D’ target. Night owls may have an opportunity to get short, but the implied $580 entry risk per contract demands that we use a ‘camouflage’ pattern on a chart of lesser degree to initiate the trade with theoretical risk no greater than five ticks.
