GLD-It's the small things that matter.

I don't know where I heard this, but it's so true, "To make money, you have to see what the crowd missed" and my own take on that, "It's the small things that matter."

I can't tell you how many traders I know who are eating through bandwidth running constant volume surge scans through out the market. Yet, how many times have I shown you accumulation and distribution taking place in a quiet lateral market, the type of market that traders pass right over. In addition, accumulation and distribution often take place in relatively low volume environments. Traders run these volume scans because they believe the spikes in volume are evidence of Wall Street buying or selling. Wall Street is not that stupid, they aren't going to show you the cards they are holding by announcing their actions with a volume spike. If they were to do such a thing, traders would be all over that spike and drive price up or down, depending on the situation and killing Wall Street's ability to get in or our of the trade at the most favorable price. Volume spikes are often advertisements after the work is done, and in many cases, traps.

Take a look at gold and this is something that was pointed out yesterday.

 Yesterday GLD just barely broke through recent resistance; hardly noticeable on a chart. There were no huge volume spikes or anything to draw attention to GLD, yet GLD is down today even in the face of a lower dollar!

 Here's an intraday look at the break of resistance, as usual, it quickly failed. This is why I say these false breaks are excellent timing indicators. An options player could have made some decent money this morning just on that small move.

 While I believe 3C is one of the most predictive indicators I've ever used (not tooting my own horn, I kind of stumbled on it by accident trying to create something different), a good ole fashioned regular Wilder's RSI showed the negative divergence on the breakout yesterday. You just had to be aware of the small things that often mean a lot.

Here 3C gave a clear signal that the break was used for distribution. Retail traders are creatures of habit and understanding those habits can be profitable. Wall Street understands them, so if you understand them, you have a good idea of how Wall Street will respond. Gold is the "HOT" trade, everyone wants it. Traders are also heavily biased toward trading the long side. Short selling has been demonized and people believe the ridiculous myths about unlimited risk and limited potential profits-both are wrong.

As I've mentioned many times, traders continue to view support and resistance as EXACT levels to the penny, Wall Street takes advantage of that. Look at the volume surge as GLD breaks resistance by just a penny. Most likely there were limit orders set to buy on a break of resistance. Then note the low volume environment that distribution occurred in and lateral prices. The red volume that has picked up since GLD broke back down is those buyers from yesterday exiting losing positions, often leveraged to the hilt.

Just be aware of the small things, they are often big events and be aware of how retail traders act, then you'll have a good idea of how Wall Street will react.

Here's yesterday's post predicting exactly what would happen.