darcy kincaid

GLD A Long Term perspective for traders and investors

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Fundamentally speaking gold             is overpriced unless you subscribe to the idea that a severel economic collapse is fast approaching. If you do subscribe to that idea, gold             is ridiculously cheap at any price that you can afford to buy it.

Recent news articles describing the increased long position in gold             of some well-known hedgies
has certainly been a factor in the long bull candles of the last few weeks as has the speculation of QE3 courtesy of the FED. Or, since a range bound market is expected to oscillate, it could be argued that it was simply time for the bulls to prevail for a while.

Technically, the GLD             chart is still in the range that began about 10 months ago. Nothing dramatic has changed as it retraces back toward the resistance level that has been tested twice and sold aggressively each time. Of interest in the context of a very short time frame is the 3 week pause that occurred the last time this price level was reached.

We don't want to make too much of the fact that though GLD             short rapidly reached it's first target level in a matter of only 5 weeks, the all-important 2nd target has remained elusive for about 39 weeks. A definite bull signal. Though that in itself is not conclusive evidence that the Intermediate Swing Long is destined to prevail, we can be certain that it has provided encouragement to all gold             bulls and is causing equal concern for all gold             bears.

The Bear Trend Line has been breached to the upside, and although normal market action would be a retest of the trend line , that does not always occur. Notable also is the observation that the Intermediate Short has a narrower trading range before failure than the Intermediate Long.

Our analysis has not changed and we see no reason from a fundamental or technical standpoint to modify our view that gold             is still in a strong bull trend and that price has been experiencing nothing more than a normal phase of profit taking and pullback. In the context of the recent parabolic move in gold             , the pullback has been minor.
GLD has twice tested the Intermediate Swing Short in the last few weeks but not able to break out. 6 attempts since 11/2011 on the Week chart. Still strong resistance.
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