I'd usually update SLV along with GLD, but I'm getting a bad data feed on SLV.
Here's GLD...
GLD was in a nice solid uptrend, I warned a few times that distribution was evident in the uptrend and the trade had simply become too obvious. I'm impartial on the long term prospects for GLD, I'm holding any fundamental views on it, I'm just showing you what the price action is telling us thus far.
As you can see above, the uptrend dies when price fails to make higher highs, higher lows and we entered a large ascending triangle. Typically this is a bullish formation, but typically it's a consolidation formation and would not last 3 months. When we see triangles this big, there's always the reality that more often then not, they are serving as a trend reversal, which can mean down or it can mean lateral in a trading range. All 3 attempts to make that higher high have been sent lower as $139.25
area is serving as resistance. The last attempt to take it out in late December, in my opinion, wasn't even an attempt, it just looked like some window dressing or a move to push GLD higher to end the year and start the new year's prospectus with better looking portfolio performance.
This hourly 3C chart shows why I feel it wasn't a serious attempt. Look at 3C in mid December where the red arrow starts and compare it on a relative basis to the attempt at $139 in late December-3C is lower while price is higher. This indicates that the move up wasn't being accumulated and in fact was being distributed so the idea of trying to take out resistance with no price support just doesn't add up. The negative divergence sent GLD down through the support level of the triangle, where it remains.
This 15 minute chart is showing some accumulation, it's my guess that we'll see a move back inside the triangle as this will stop out shorts and pull in some longs. Whether this is just some HFT churning/limit order fishing or something else, it's difficult to say. My guess is it's not the type of accumulation you'd expect to see if there were a serious attempt to take GLD to new highs.
There may be a short sale trade in there if this sets up the way it looks like it wants to, but again I don't see that as being anything more then a swing trade at the moment. It may be that this trade was in fact just too obvious and this is a massive shakeout. However, until we see some real action indicating that this ETF is going to move one way or another, I personally don't care about what the goldbugs are saying-"It's different this time" is the last thing a lot of people have heard before sustaining massive losses in these mass psychology trades.
I'd like to update silver and will as soon as the data feed is back on the ticker, there seems to be a lot more in the way of dynamics in play in SLV/silver.
