We are taking a short trade in gold based on the fact that the market closed below the Sell 1 (S1) level at $1,468.20. Automatically, when I come into the trading room, the automated artificial intelligence algorithm, the Variable Changing Price Momentum Indicator (VC PMI), provides the information I need to trade the next day. We were long gold on a swing trade and took profits at $1,469, which we did. We profited a net $3,180. I went neutral, and the VC PMI tells you that if you take the signal and go short to place a stop at the level above, which is $1,469.

You can see here how I update my subscribers when I do a real trade.

Gold daily mean completed

$1,461 next target

Major reversal unfolding

VC ONI Last Tuesday at 12:47 PM

VC ONI Last Tuesday at 4:45 PM

Metals alert

Fast market to upside

I know my stop is $1,469. If it closes above $1,469, I am out at the market. The target is $1,462, which the VC PMI also provides. Make sure that your stop is on a 15-minute bar. I don't use straight stops. This gives me the opportunity when the market is overbought to benefit from the volatility of the market as it comes back down to the mean. The artificial intelligence identifies where the average price is. You can lower your stop to your entry point as the market comes down, so that if the market comes back up, the worst case is that you break even.

Looking at the Bollinger band, we can see that the market is at an extreme. I am going to flatten my short position and I have one contract. You can do more than one contract. I am going to take the profit on the one contract, increasing my profit to $3,310 for day trading for the day. I am going to now let the market do its thing. The market is telling me that this is a level that is extremely over-sold based on the Bollinger band. Only 5% of the time will the market continue from here down, but it is rare. It might get down to $1,462, but it is rare and you should trade the highest probabilities.

When the market comes down and touches a signal, it activates a setup for you, either up or down, based on the Buy 1 or 2, Sell 1 or 2 levels, which is when you go neutral. If you trade at the mean, it is a 50/50 standard deviation either way. If you decide to do that, I suggest you use a reversal stop. When the price reaches the average for the day, the momentum goes neutral. Using the 15-minute bar, if the price closes above the average, it identifies a bullish sentiment for the market. I don't trade at the mean. I want to trade the extreme levels, S1 or S2, B1 or B2, which are much higher probability trades of the price reverting back to the mean. We use the VC PMI's five level structure to make the highest probability trades. The VC PMI provides specific entry, exit and stop points to trade for the next day or week.

Gold

Gold has come down to a major area of trend-line support in a descending channel. It is a correction of the big move since May/early June. The market has reverted back to the mean. When the Variable Changing Price Momentum Indicator (VC PMI) identifies the Buy 2 (B2) level, there is a 90% probability that a reversion to the mean will occur, which happened on the 12th. The market was testing the level of demand that the VC PMI identified.

With trades based on the VC PMI recently, we are up more than $3,000. Now we are neutral and are waiting to see what the market wants to do. The next target for the daily signals after reaching $1,469 is $1,474.

Weekly

The weekly is almost the same chart pattern as the daily chart. The weekly data is telling us that the market almost came down to the $1,441 level, which we recommended in our previous report. As the market came down to $1,441, we said it was a 90% probability that the market would revert back to the mean, which it did. The key is to find the extreme levels above or below the mean for the daily, weekly or monthly, and then trading at those extremes.

For the weekly, the target is $1,479. If you are holding stocks or ETFs, watch what the market does when it gets to that level. If you are long from $1,441, B1, and the market reaches $1,479, start to take profits or reduce your positions. You are looking at a $38 move, which produced about $3,200 out of that move when we traded it.