I've been trying to decide what to do with an equity long position, GLL (Ultrashort Gold), it's currently down -12.43% on the position and -0.9% of portfolio, so risk wise it' still way below the 2% target, but If there's no reason to hold the ETF, why wait for -2% to be hit?
Gold/GLD are curious, they did run pre-F_O_M_C quite a bit, they did run on QE3, but they haven't done much since then, which leaves gold in a flat range mostly between $170.50 and $172 (GLD). These flat ranges always seem as if there's nothing happening, but more often than not, these are exactly the areas where underlying movement from Wall Street is in play; ether it would turn in to a bullish event for gold or this is just a longer version of the "Quiet market is a dangerous market".
So looking at both the Gold (mini-YG) future and GLD, I decided to hold GLL at least for now. Gold should have shown follow through on Friday, at least gold if not the entire market, it didn't. Longer term I'm not making any judgements about GLD and I'd rather stick with shorter term trades right now like GLL. As I said yesterday, not all negative price action is negative and not all bullish price action is bullish. For example, if QE-3 is not priced in to the market or not adequately priced in, then it makes sense smart money would want to add to GLD/gold, almost always they do that during price declines or at flat areas after a decline. So it remains to be seen what would happen f gold did fall, whether it would show something that goes against all conventional wisdom. For now, I have decided to leave GLL in place.
1 min Gold Futures were negative at the overnight highs and are leading negative right now.
The 1 min GLD chart (even though it' a totally different asset (an ETF vs a Futures contract) and even though the code for 3C varies a little between what is used on futures and what is used on stocks, ETFs, etc, GLD 1 min is giving the same signal.
In fact the futures timeframes tend to be stronger so the equivalent timeframe for a futures 1 min chart may be more like a 2 min chart on stocks, the GLD 2 min chart clearly shows a similar leading negative divergence at the exact same time (11 a.m.-12 p.m.)
Gold Futures 5 min is also leading negative and was negative overnight at the high.
The GLD 10 min chart is about the same, it is leading negative as well.
Gold 15 min shows a negative divergence on Friday after the QE-3 announcement and Gold held flat and then dipped, there was a small positive divergence lifting gold off the lows and in to another negative divergence at the overnight highs.
The GLD 10 min chart during the same time period (after QE3) shows the same initial leading negative, a small positive that lift off the lows and another negative in to the intraday highs.
The white box on date shows post QE-3 activity, again the same negative divergence right after the move up, as if profits were taken, the same positive at the gold futures lows and the same leading negative which is even worse right now.
GLD 60 min, even ignoring the trend here, GLD's action has been almost exactly alike.
Again ignoring pre-F_O_M_C, the 4 hour chart has deteriorated.
As has the hourly gold futures chart, which had a positive divergence in to the F_O_M_C announcement and a clear negative since, for these reasons, because I see no hint of sustained accumulation, I'll keep GLL open and see how Gold/DLG reacts on a potential move down.
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