GLD Bounce may set up a long position in DZZ (Short Gold)

We have been watching a big triangle in GLD and unusual volatility, I have said this is either a bubble or an intermediate top, but my expectations were for GLD to break down, which it did. What we know is that major breaks often see volatile counter trend moves shortly thereafter, after that counter trend move, that's where we want to look to short an issue like GLD, we don't want to get caught up in the counter trend volatility unless you want to run a quick leveraged long position for such a move.


Here's the GLD Update

 The short term charts were positive showing short term accumulation before GLD moved higher.

 You can see the same on this 5 min chart, this is what appears to be the start of the volatility based, counter trend move since GLD did break down as expected.

 The 15 min chart isn't showing a huge divergence, but enough for a the kind of move I'm expecting.

 Here the 60 min Trend Channel has held the entire decline out of the triangle top, it has now broken above the top of the Trend Channel signaling a short term change in trend from down to up.

 The daily Trend Channel is solidly still short, the red area would be the stop out, the yellow area is a very bearish break away gap.

Here's the daily chart with the triangle I suspected was some sort of top and the 150 day moving average that has provided support for several years without fail, both were broken to the downside and the yellow arrow is the breakaway gap mentioned above. As usual, when an important break like this occurs, we see a counter trend move (up) usually to kiss the triangle goodbye or perhaps the moving average. So in the short term, GLD looks like it will see the counter trend bounce up, especially is the Euro rallies. At some point, we'll get negative divergences as the bounce nears the end and the shorts pile in, that's where a DZZ long may make some sense or just an outright short on GLD. You may want to consider playing a short term long trade on GLD with a leveraged long Ultra ETF, but it is short term only and you need to be quick about exiting the trade when the time comes.

Keep an eye on this one, there are a lot of longs trapped right now and the next lower low will create a snow ball effect as they start to sell at deeper losses. This is the first GLD trade I have seen in some time that makes sense.