GLD/Gold Update

I have been cautious of GLD ever since it first hit the 150 day moving average where it has been a screaming but for nearly three years, but this time it looked different and I have urged caution. There are a lot of things that don't make sense, why is oil looking so weak with the geopolitical tensions, why is gold looking like a potential top when we are in one of the biggest fiat currency crisis the world has seen? I don't know the answers to these questions, the same way I didn't understand why during the 200 tech meltdown, homebuilders were seeing incredible amounts of accumulation only to see a housing boom a few short years later. It's hard to know why smart money does what it does and if you wait to for the reason, you missed the move.

In any case, GLD doesn't look that great here, it looks like a top is forming, whether it is a bubble as I have brought up or an intermediate top, I don't know.

 Large triangles at the end of trends, whether up trends or down, tend not to be consolidations, but rather tops or bottoms, this is what I would call a large triangle, much larger then a consolidation pattern and volume is correct for the pattern. It is near the apex so the break is coming shortly. I would guess that the break will be down (not accounting for possible head fakes as I have seen head fake breaks on triangles of this size, ADM comes to mind) .

 Here it is in the trend, volatility by volume looks right for a top.

 Here's the 150 day moving average which has been a great place to buy over the last few years, however the way GLD approached the 150 on the last run was worrisome, it wasn't a pullback, but a full on decline and this is why I urged caution in buying near the 150 day ma. As you can see, thus far the touch of the m.a. has not led to a new leg up, but rather a volatile triangle. A break below the moving average will be a very bearish sign and I would certainly be looking for short exposure.

 Short term the most recent bounce looks like it has played out already.

 On a 15 min chart we see accumulation areas in white and distribution areas in red.

 More disturbing is the 60 min chart which has gone from confirmation, to distribution to a leading negative divergence lower then any other 3C reading in more then a year.

The long term daily charts are just as bad and this 6 day that reduces noise is leading negative for the first time in nearly 7 years. Something is certainly going on with GLD, we are not out of the volatility zone in the near term as a false breakout could occur, or even a break below the 150 day moving average (very bearish) is likely to test that average and perhaps even bounce toward the apex of the triangle in the "Kiss goodbye" retracement that is often seen. However, for those who have a longer term perspective and are patient, this could be a huge opportunity in GLD. While short term swing trades can be taken, the real money would be in a trend reversal. We'll keep watching GLD, this has been a worrisome trend that has been developing for some time now.