A combination of Fed buying and short-covering continued to push the market higher with very small pullbacks, and pullbacks are getting smaller and smaller. The market is clearly in a capitulation phase at this time.
When all the shorts have covered and are out of the market, when everyone are on one side, the reversal can be sharp and swift. When that reversal will be, there is no way to tell, and it can go on longer than everyone thinks.Ket to trading the capitulation market is to go long with stoploss, or trade the market using long call options, because a long call options has a built-in stoploss.
For trading this fast uptrend using the 50-minute chart, as long as the abc wave pullback does not clearly violated the 50-moving average, we want to be on the buy side.
Clearly breaking below the 50-ma is an indication the market is going into an abc wave retracement or a possible alrge pullback down. However, a rally-back above the 50-ma is a long signal
Gold market shakeout has begun, the goal is to shakeout most of the stubborn longs, the shakeout has to occur before the bull market can resume, target cycle bottom is in July.
