Gold is in a defined downtrend as noted on this chart. Today in China, the rate came in higher than expected and could have led to a sizable market rally, but instead it has only led to a reflex rally that is currently holding under the optimal at 161 where there are 11 days of "market memory" or supply in this downtrend. Until GLD climbs above that 161 level, then I would use a 162 stop and I think shorting with a target of 150-148 over the course of the next month. Technical Tim, April 9, 2012 11:41AM EST
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GLD got stopped out. How funny to have someone "disagree" with a chart AFTER it gets stopped out. Really? Please people. There is a big divergence now between gold stocks, which hit new lows on this move... and GLD which didn't break the Dec-Jan lows. That may create some interesting rebound trades. Hope you all have enjoyed all of the SLV, GLD, GG comments over the past six months. There have been many good calls along the way.
Thanks Algo kid. Yes, there are some tough "customers" out there. And yes, it was a tight stop as noted in the previous comment yesterday... But if GLD goes back to 161.50 and stays under 162 for an entire session, then it will set up another sell signal from my technical work. The 165 level is a good stop area. I do feel GLD is just a reflex rally, but I don't want to be a hero. 168-170 is where there are some strong sellers, so I may re-sell up there and see what happens. The financial stocks are turning back up and I often find they are good barometers for trading gold stocks and gold in general. Cheers.
While I always enjoy your analysis, I don't agree here in the long/intermediate term. I'm not a "gold bug," simple an opportunist. While real yields remain negative (or below 2% by some estimations), I expect gold to appreciate. My gut wants to see a completed inverted H&S pattern with a target of 220+ over the next 6-12 months. My holding of gold is more portfolio insurance and lack-of-faith-in-our-monetary-policies-based. Assuming the Euro implodes, China has a hard landing, or QE3 commences, gold could spike higher. That being said, I'm long a few major and junior gold miners and a few royalties (for full disclosure). :) Good hunting!
Thanks mrd2015 for your perspective. Fortunately I also agree with your line of reasoning and have been positioned long silver for many years (since 2003 and have spoken to many groups of investors about the logic of owning protection from paper money) as I too have witnessed the financial devastation created by out of control Gov't spending. Markets often do get ahead of themselves and this gold trade is one of those trades. Note my trades back in September in GLD and SLV. They made 20%-30% on the short side in less than a month. Then, when oversold, I got back on board on the long side and made another 15% right after that. Again, they were overbought and the opportunity came again to go short... well... it has been a terrific time to "trade" because of the opportunities of news about QE3, European financial disaster (Greece, mostly), and a lack of gold market response to the upside on that news. The best trades I have seen since 1986 in gold have occurred when gold just didn't respond to the news over a period of a week. I hope that gives some additional insight into my willingness to take trades on either side of the market going forward. I do appreciate your comments. Cheers. Tim 10:17AM EST Fri, Apr 13, 2012