GLD – 15 Jun

Disclaimor: GLD is exposed to unallocated gold and is not suitable as an investment. These charts are for traders who understand what GLD is and know how to manage the risk. For bullion investment PHYS is more suitable and possesses 10o% allocated gold bullion.

GLD is tracking the 20 day moving average and closed higher at 149.12. Resistance around the 151 level and support around 147.50. The short term trend is down with a pattern of lower lows and lower highs. The wing high at 151 needs to be taken out to neutralize the trend. Further minor support exists at 145 with stronger support at 143.42. the 50 day moving average has supported the entire longer term up trend and continues to do so. RSI is mostly neutral with plenty of upside potential and stochastic is hooking over. It is not prudent to buy under the 20 day average within a short term downtrend, but the risk is measured for those want jump early on a potential reversal by putting a stop just below 147.19.

The longer view chart shows a triangle forming. This is a continuation pattern that shows consolidation. We are approaching the apex and a breakout point. Notice the Bollinger bands are narrowing, telling us volatility is due to increase soon. 147.19 looks to be the line in the sand and is critical support. A break below there puts the Fibonacci 38.2% retrace into play, a natural support zone buttressed by 2 previous swing lows. Also a break below the 50 day moving average at this point would not be constructive to the bullish argument since it has held going back to mid February.

The Elder Impulse chart painted a green bar today by virtue of both the 13 day exponential moving average and the MACD histogram increasing day over day. This gives a buy signal for long positions provided the price is above the 65 day EMA, which it is. The Elder system is designed to identify and enter a momentum move and exit when momentum wanes. This is signified by a blue bar that is painted when either the 13 day EMA or the MACD histogram starts decreasing day over day. The problem with using the Elder signal is that this chart is not currently trending well in a mostly sideways move. Whipsaws can result. Again a tight stop under 147.19 would minimize risk for those who see a short term trend reversal happening.

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