GLD/SLV

Yesterday's GLD/SLV post

As you can see, yesterday I was waiting for GLD to make that new intraday high, which is almost a prerequisite for any reversals now (some sort of false breakout); today that happened and what I was hoping to see developed.

 Crossing above the top trendline today, GLD crossed into new high territory where I was hoping to see a false breakout as indications have been showing distribution in GLD. This is such typical behavior now, it's almost guaranteed. The 1 min chart not only did not confirm the move, but went negative very quickly. The idea here is simple, technical retail traders (in gold and silver tend to have very strong opinions) are the demand that the institutional money can sell/short into. Locals know that retail will step up and buy a breakout and the locals are only too happy to take the other side of the trade. Here, the locals won, retail as usual lost. I wrote at some length about the psychology of the new trends in the market and why traders fail to adapt to them. In any case, we are approaching some gap support so in the short term (intraday) that may act as support and GLD may bounce around a little between the two trendlines, ultimately the gap support should fail.


 This 15 min chart went negative today, like I said earlier, it can happen in a day, but rarely does, here it did and the volume shows why. The 15 min. has also gone into a leading negative divergence so I think the locals did a lot of distribution today and/or short selling.

SLV went negative on a 10 min chart today which is also pretty rare, it's also in a leading divergence. SLV has been stronger then GLD all week. The next support level is the former intraday high breakout level. Again, we may see some bouncing around between support and resistance or at least a bounce off the next support level. I still think SLV will trail GLD to the downside as it still is stronger. Note that the divergence today on GLD that was impressive happened o a 15 min. chart, in SLv, a less influential 10 min chart.

I'll feel more confident of SLV's downside reversal (a swing move down) when the next level of support is broken.

GLD looks to be in worse shape to me.