Gold Breaks Up

The downtrend continued yesterday and on the SPX daily chart the middle bollinger band was tested. If this is just a retracement, or the decline so far has been the first part of a topping pattern, then this is the obvious bounce level. On a break below here, rising channel support, the lower bollinger band and the 50 DMA are in the 1365-70 area and that would be the obvious next target:

On ES a declining channel seems to have formed from the high and if so we would be due a bounce within that channel shortly. There is some positive divergence on the 60min RSI:

EURUSD reached rising wedge resistance yesterday, pinocchioed it a couple of times but closed the hours within the wedge, and then reversed, breaking short term uptrend support. The next obvious target is at rising wedge support in the 1.235 area and there is a possible H&S neckline at 1.243:

TLT is retesting an important level on the weekly chart, and that is the long term rising channel resistance that was broken earlier this year, held once as support and then broke. This is an important technical level at 125. This may just have been a retracement on TLT but if so, I'm not wild about the failure to hit the obvious target at the support trendline from last summer. We might yet see TLT return to hit that:

The big news yesterday though was that gold broke up. Looking at the action since the high we have been watching a large descending triangle form. These are actually 64% bearish patterns but perform best on breaks up, reaching the upside target 84% of the time according to Bulkowski. The target in this case would be in the 2050 area. I'm a bit wary of triangles as they have a nasty habit of breaking one way before resolving in the other but this break looks very promising and gold is now provisionally in a new uptrend:

Silver is now testing declining channel resistance from the high, and if it breaks up that would act as confirmation for the breakout on gold:

I'm slightly wary about this current downtrend on SPX here because I know that important highs are often preceded by a sharp spike downwards. If we are going to see a strong bounce then yesterday's low is the obvious place. On a conviction break below that area the next obvious target is the 1365-70 area, which is the key make or break area for the bulls for this uptrend since the June low.