Trade view /
19 July 2016 at 7:27 GMT
After my trade idea of July 11
, where I said gold as represented by the SPDR Gold ETF (GLD) (GLD:arcx) is over-extended in the immediate to near term, we have seen a pullback in gold, and I am taking full profits.
Gold remains in a new and intermediate-term up-trend that I want to respect as the primary trend for my timeframes. Any "fades" of this trend, such as outlined in my July 11 trade idea, remain counter-trend, and I view them simply as cash-flow generating trades rather than the start of a new down-trend.
Note on the multi-year weekly chart that the February breakout from the defined down-trending channel remains firmly in-tact, as does the low-yield and low economic growth environment more or less globally. SPDR Gold ETF (GLD) remains in a new, intermediate-term up-trend
On the daily chart, we see that since July 11 the exchange-traded fund has corrected more than 2%, and in my view the most severe of these near-term overbought readings have now been worked off. GLD has retraced back to its yellow 21-day simple moving average and to the up-trending former resistance line, which may now become support. To be clear, I would not rule out a further consolidation move lower in GLD in the near term, but the highest-probability part of this mean-reversion move lower in GLD now seems to have run its course. So I am happily taking profits.
SPDR Gold ETF (GLD) has retraced to (yellow) 21-day simple moving average
— Edited by John Acher
Non-independent investment research disclaimer applies. Read more