GLD Update

Remember, I'm not a gold bug, I'm not against gold, I'm just showing you what's happening with GLD within the context of the market and how the market typically reacts. I've tried before to argue against what I've seen based on the fundamentals and the charts usually won.

 GLD 5 day chart with an RSI negative divergence and a lateral toppy looking formation recently.

 1-day char, again RSI negative divergence on yesterday's break out. Today's candle is extremely weak and showing no upside momentum, which opens the door to a reversal.


 3C 5 min of the breakout from the top. We know obvious resistance is usually obviously run by the market as technicians take the top looking pattern to be a failure and go long, the market loves to set up bull traps like this-we see it nearly every day, so we must consider this breakout as a potential bull trap/false breakout.  There's a nasty 5 in negative divergence which suggests heavy profit taking or even distribution, it's not the breakout follow through we' expect to see.

On a 1 min chart, we see the lateral price movement that occurs during distribution. Any move in GLD below the breakout around $139.50 has the potential of sending a snowball of longs selling into the market, which raises the supply equation and price drops fast. If you see this and are inclined to play GLD short, you can do that or take a look at the leveraged DZZ ETF-especially for those who can't go short and need to buy long to get the short exposure.

Just saying, we know how the market operates, we need to watch this, especially as gold has become such an obvious trade.