GOLD BUYERS, BE CAREFUL! THE NEXT TRAP COULD DESTROY YOU!So, there is no doubt that yesterday’s move was extremely shocking, and the big players played a massive game in Gold. Gold made an almost 5% upside move in a single day, and overall, almost everyone who had been selling since mid June got trapped.
I told you yesterday itself that this was a stop loss hunting move. As the upside momentum continued, random buyers also started jumping into the market, which gave Gold more liquidity to target. That is why the market continued pushing higher until it reached the areas where stop losses were available.
But now the biggest question is: Was this a genuine trend reversal, or is downside still possible in Gold? Let’s talk about it.
MONTHLY TIMEFRAME SHIFT 🟢
First of all, Gold had been bearish for the last 3 to 4 months, and finally, in August, we have seen a super bullish monthly candle. This is something we absolutely cannot ignore.
After months of bearish pressure, the strength shown by the bulls is significant. Gold broke through almost every major resistance level in a single day. So, there is no doubt that whoever positioned themselves on the downside had a strong reason behind their trades.
Because of this, for the short term, I am shifting my bias toward the buying side.
But that does NOT mean I will randomly keep buying Gold.
Of course, I will wait for sellers to build liquidity first, and then I will look for opportunities to trap them.
THE EMOTIONAL GAME 🎯
If you look at Wednesday and Thursday, I believe the market is already playing an emotional game.
The traders who were fighting the upside yesterday have now been given a new hope because Gold has started selling from around 4300 today.
And just like the previous time when Gold rejected from around 4200 and eventually dropped below 4000, many traders will now start believing that Gold will once again sell heavily from 4300 and deliver a major downside move.
But in my opinion, that decision would be largely emotional.
A lot of traders will try to chase that downside because of their previous experience and ego. But practically speaking, after such a huge one day move, Gold taking a complete U turn and immediately starting another massive downside trend is something that happens very rarely.
For me, that scenario does not look very likely right now.
WHAT I EXPECT TODAY 👀
So, I strongly believe that today’s high will either be broken or swept for liquidity.
That is where the real game can begin.
At the same time, I also believe the market is trying to trap the buyers who entered Gold today after the market opened.
Just like yesterday, these buyers have come into the market with the expectation that Gold will continue moving higher.
But trust me, the market does not usually deliver back to back rocket moves unless there is a major fundamental change or Gold has genuinely started a new all time high journey.
Until we see that kind of fundamental or structural shift, I am not expecting another major upside move today.
Instead, I believe the market could spend most of the day trapping buyers.
The buyers who are already in the market may see their stop losses getting hit. And then, as more traders start chasing the downside or trying to buy again after seeing temporary upside reactions, the market can continue giving them hope before trapping them again.
MY PLAN FOR TODAY 🧠
So overall, I believe Gold could spend most of today playing a psychological game with buyers.
Tomorrow, we may again see buyers becoming active in Gold.
But for today, my plan is simple.
I will wait for the market to complete its liquidity sweep. Once the buyers enter after seeing that move, I will wait for confirmation of a reversal and then look for an opportunity to trap them.
This is the kind of trap I believe the market could create today.
Based on my experience, whenever the market delivers a massive move, the following day often becomes more sideways and relatively smaller in terms of movement. The market uses that environment to trap both buyers and sellers.
And remember, yesterday’s major move already consumed a huge amount of available liquidity. A lot of stop losses have already been hunted.
So, the market may not have enough fresh liquidity to target for another massive move today.
That is why I am not expecting a major move in Gold today. My primary intraday focus will be on identifying and trapping buyers.
I hope you guys enjoyed today’s short and simple psychological market analysis.
Good luck, everyone. Trade safe, stay disciplined, and I hope you have a profitable day. ❤️
By the way, what is your next view on Gold? Let me know in the comments. I’d love to know what you’re expecting next.
