GLD Update

've been warning now for several weeks that something was wrong with GLD, 3C wasn't keeping pace, there were multiple negative divergences, etc. In a post this week I asked, Is Something Broke In Gold ?

I also knew we had people with positions in DZZ and short silver as well as puts on GLD and wondered how some of our traders were doing, I got a response earlier today from one of our options traders, he's up  118% and 108% with puts on GLD. That's what I like to hear!

Here's GLD as of now...

 Here's the daily chart, talk about a bull trap, nearly two weeks of gold longs are underwater now. The red arrow shows a support zone that may see a consolidation in GLD, but I think it has further to go based on how bad many of the charts have looked and a few other reasons I will touch on.

 Here's the final 10 min distribution chart and reversal in GLD, currently confirming the downtrend.

Earlier the 5 min chart hit a relative positive divergence and we got a small consolidation from that, I believe that is in the history books now.

I would probably look to a trailing stop for partial profits and let the rest run, and adjust according to the signals that we get as we move forward.

The fact that margin has been increased twice this month in Shanghai and I believe through a few independent brokers, won't hep the gold longs. Also as I mentioned, Paulson's fund had it's 5 top holdings 4 of which were massive losers, I warned, the only long position he has to meet redemptions is GLD and if he starts selling, he can knock GLD down in a single day by 5% or more alone. We may be seeing that right now.