Gold: How to Trade the New Breakout

’s Confirmed Breakout. I posted mostly some long-term charts we’ve been following during the 4 1/2 year consolidation phase which is finally coming to fruition. They say patience is a virtue, but 4 1/2 years is a long time to be patient.

We could still see a backtest to the breakout point, but that would just be part of the breaking out and backtesting process.which shows the 2020 trading range which I’ve labeled as a flat-top expanding triangle. This nearly 4 1/2-year consolidation pattern can also be called a cup and handle or a H&S consolidation. At this point, it’s just semantics.

Keep in mind the job of a consolidation pattern is to sow doubt in your mind about the validity of the bull market and after 4 1/2 years few will have a hard time adjusting to the new paradyme shift that is now taking place from consolidation to impulse. Also the bigger the consolidation pattern the bigger the impulse move.

Note the H&S consolidation pattern on the chart above. You can see how it fits into the apex of the 2011 triangle which was strongly suggesting the top trendline was going to give way.The breakout gap from the massive 2011 triangle was never backtested with Gold making a new higher high against the US dollar this week.Below is a ratio combo combo chart with the Gold:WTIC on top with Gold on the bottom.

If you go back up to where I posted the Gold:USD ratio which shows the 2011 triangle consolidation pattern that is the chart I got the idea for this possible scenario below which I know will sound ludicrous. From a Chartology perspective I’m strongly suggesting that the next impulse move higher is now underway where there will be consolidation patterns that form along the way but they will be buying opportunities. As they say, we’ll know in the fullness of time. All the best…Rambus which shows the two shorter-term patterns on a relative basis, the double-headed H&S consolidation pattern on top with the May 2022 triangle below.

We then got a backtest to the neckline which came up just a bit short when the island reversal pattern formed reversing the move from down to up. There is a good chance that last Friday's monster move, which opened with a gap, has more room to run before its time to consolidate. Friday’s gap looks like it could be a continuation gap or a halfway gap to the upside.

XAG/USD S&P 500 Rambus Inc

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