If you have been a member for a month or two or since the start, then you know my two least favorite assets to analyze are gold and silver or GLD/SLV and why? Simply because they are manipulated more than anything I recall seeing except 2012's Q1 macro economic data and the economic data about 3 months before the Presidential election.
Some other time I'll get in to why, but for now let me just say that it was about 2 weeks ago, maybe a bit less that the COMEX lowered margin requirement rates for a bunch of assets including gold and silver, my first thought was, "Oh, both will probably pullback and be accumulated". I'm not saying anything about SLV or miners through this post, it is GLD only.
I've seen some strange signals in all 4, very, very strong positives, but in 1 or at most 2 timeframes, this would not be the norm, but would be common if there were a large underlying transaction that took place for a limited amount of time, perhaps several hours or so and the timeframe with the exact, perfect look back period would have caught it, as it stands the 10-15 min charts caught it in all 4 assets (GLD, SLV, gold miners and junior gold miners). For me, as strong as some of these signals are, 1 timeframe is not enough to give us the information needed to have a real edge (what kind of transaction, a buy or buy to cover, how big really, if it is just the start or if it is complete and timing). GLD has a few more hints so here's why I'm starting to like Gold in the area and currency debasement doesn't hurt demand for gold either as China and Russia are proving to the world with massive purchases as they explicitly do not trust the $US Dollar to continue forever as the reserve currency of the world.
GLD with a bearish consolidation/continuation triangle and a break below it, this absolutely could be a head fake move as important support still hasn't been touched, but the head fake move would have started yesterday and volume was up right on the opening move meaning stops/orders were hit.
The Linear Regression Channel shows a subtle change, from more volatile breaks above and below the extreme ends of the range to a move to the middle after having spent a decent period of time in the upper half of the channel.
The daily chart, I know there are a lot of divergences, just start from left to right and follow price and 3C, the important part is a current positive divergence that occurred only after we saw a deep leading negative divergence and then the COMEX margin announcement making it cheaper to start a position in gold by some 10-15% on the COMEX.
The 4 hour 3C chart, note the last bearish triangle from late May-August of 2012 and that traders would have expected vs. what actually happened, we have a similar triangle now with the move below it as technical traders would expect and the volume to show that it was acted on. Also note the positive divergence currently.
Here's the triangle on a 10 min chart, the important thing is the 3C 10 min indicator didn't follow price lower and instead stayed in leading positive territory.
The 5 min chart even more so as it should with more detail.
These are the /YG Gold Futures, not ETFs, actual futures.
The 60 min chart with a relative positive divergence after a couple of negatives send price lower.
Like the other assets mentioned, a leading 15 min positive divergence.
Very short term, the 1 min intraday suggests maybe GLD pulls back a little.
If you are interested in the position, I personally would give it some room on the stop by taking on fewer shares initially with a wider stop, I'd also look at this as a longer term position. Once more data comes in we can refine our analysis, tighten stops, add to the position and decide what length/duration we are likely looking at.
I'm not a big fan of trading GLD so if I put it out, there's something I like.
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