GLD/SLV/USO UPDATE

So far, things have gone largely as expected in all 3 ETFs since last week; hopefully the early information gave you an edge on some trades.


GLD

 The idea behind the GLD reversal and in fact most reversals now (this is good information to understand as this happens with such frequency in the market that it is becoming predictable) was the false breakout to new intraday highs in the white box on this daily chart. The importance of this is kind of like priming an engine in this case for a reversal. As I've mentioned, Gold and Silver bugs tend to be very emotionally committed to their ideas about the metals and need very little justification to become buyers. Technical Analysis books for decades have told us that we should buy breakout high as we see here. This allows smart money to sell or most probably sell short into this buying demand; it also creates bag-holders that are at a loss when the ETF falls, as it falls more, the loss is greater causing more and more of the once buyers to become sellers which provides the snowball effect for Wall Street's short positions.

 The problem for most technical analysts/traders, is that they have no way to determine whether the breakout is a real event or a false trap. Most don't even understand how prevalent this practice is, others wouldn't believe the information showing it's a trap if you gave it to them. 3C showed very clearly that the breakout saw a lot of distribution on that day which can also be read as short selling.

 As I said later in the week, because GLD was now trapped between resistance and support that it would bounce around a little between the two trendlines before breaking lower, today it decisively broke lower and support is now resistance.

 The longer term 30 min chart which compares the former intraday high with the new higher intraday high from last week, looks very weak so I suspect GLD (which will have bounces along the way) has more downside to go from here.


SLV

 All last week I said SLV is about a day or two stronger then GLD meaning it would follow GLD, but take another day or two to break the same levels of support.  SLV is currently at the support level of a new closing high breakout, but has lost a lot of ground today.

 Here's the breakout day new high which also saw distribution in 3C and other indicators.

 Right now SLV is in the same position as GLD last week, caught between support and resistance where it has bounced off support this a.m., about a day or so behind GLD.

USO

 USO was at resistance of a new high above the March highs, which was a perfect place for it to pull back and regroup before the next challenge of the March highs, today it has done so.

 Here were my two potential (most likely ) targets for USO.

 The 30 min chart showing the distribution the last 3 days

The 60 min chart remains very strong suggesting this is little more then a normal corrective pullback.