Juejin Old Cat: Seven consecutive bullish days turn bearish, midnight waterfall plunge signals market has arrived

Today’s gold market saw bullish momentum in full force, with a spectacular seven-day rally. Prices surged from around 4784 at the open to a high of 4964, with a single-day increase exceeding 3.3%. The bulls appeared unstoppable. However, just as market sentiment was unanimously optimistic and retail investors chased higher, the eighth candlestick quietly turned bearish. This is the first clear signal of waning bullish momentum.

From a news perspective, the market’s excessive optimism about a Fed rate cut was fully released today, fueling this short squeeze rally. But such a one-sided trend lacking substantial positive support inherently carries significant correction risk. Once sentiment cools, concentrated profit-taking will trigger a chain reaction.

Technically, closing bearish after seven consecutive bullish days is a classic “bull trap” pattern. After reaching the previous key resistance at 4964, upward momentum clearly weakened. Indicators like KDJ entered seriously overbought territory, with very clear divergence signals. On the hourly chart, the bearish candlestick’s body retraced most of the previous bullish candle’s gains, indicating that bearish forces are rapidly gathering, and a deep correction is imminent.

Therefore, our strategy remains firmly bearish. For midnight trading, it is recommended to short in the 4930-4940 range, with the first target at 4880. If this level is broken effectively, further downside targets include the key support at 4850. Resistance above is set at today’s high of 4965.

Disclaimer: This article reflects only Juejin Old Cat’s personal views and does not constitute any investment advice. Trading involves risks; please proceed with caution. Investors should make independent decisions based on their own circumstances and bear all associated risks.