This week on Tuesday I started a position in GLD, today GLD is up about 1% as the $USD has taken a MAJOR tumble of -.77%
You may recall in that post that we were seeing positive signals in to the trade Tuesday (more so than the general market in the short term charts) and even though GLD didn't react well on Tuesday to the F_E_D or Bernie's speech rather, as always, the initial knee jerk reaction to anything F_E_D is almost always wrong.
Gold/GLD breaking out of that triangle I showed you in that post, today...
And the US Dollar breaking down hard today after a head fake move first at the yellow arrow above resistance, the EXACT SAME head fake move I showed you as it happened that showed distribution in to the move higher!
As for GLD specifically, it looks better than most of the stocks and averages VERY short term (as in the pullback) and why shouldn't it with the Dollar dropping like that. Remember last week I said the KEY, the FULCRUM to getting this cycle kicked off to the upside was the $USD dropping and that's a big drop today, also a big gap to leave open.
You saw earlier the EUR/USD and how much the Euro is up and how much the $USD is down, unless I missed something, the only significant FX news re: the Euro is that the Euro-Group summit was CALLED OFF! This would send the Euro and Dollar the EXACT OPPOSITE direction, there's only a few organizations that can make the EUR/USD move like that so once again on this Black Friday it seems the invisible hand of 33 Liberty Street in New York is at work in the markets and we have proof or at least a clue as to what's going on.
As for positioning, all of the longs started for this move are still open and will remain open through a pullback/consolidation/etc. The only thing a pullback opens up is an opportunity to start heavier leveraged options positions like AAPL calls and maybe adding to some already open positions.
Here's what GLD looks like right now (which is better on average in the short term than most risk assets, longer term about the same)...
Here's 1 15 min chart of GLD, note that the price of GLD was knocked down with distribution in September and as it hit the lows 3C shows a big round of accumulation and Gold is up from there, of course smart money isn't going to pay a premium for gold or any other risk asset, that's what the entire cycle is all about!
Very short term the GLD 1 min chart looks like it's in confirmation if you looked at today only, but back out and it's not seeing confirmation very short term, likely there's some profit taking in to this move up as they likely know Gold will come down a bit next week, probably early in the week-more on that in a minute.
The 2 min chart shows the improvement last week that made me like Gold and open a position there, but on this pop, it is not confirmed, 3C is not hitting a new high with GLD, so again we have a VERY short term negative divergence today.
The 3 min chart shows why I opened a long in Gold/GLD last week, but again on the pop today, there appears to be confirmation, but...
Back out a bit and you see there isn't. This isn't heavy distribution, it looks more like some quick profits being taken on a day that would otherwise be pretty quiet.
The 5 min chart's trend as it is a stronger indication of underlying trade, looks much better, but even today we still have a small negative divergence in to the pop up. The trend should remain, but I'm betting gold pulls back next week otherwise why take profits in it today? Because they know they can buy it cheaper next week and it will move higher after that.
Now, the KEY to all of this, the Euro and $USD
VERY short term, the $USD is seeing a positive divergence today, that confirms the negative short term divergence in gold as they trade exactly opposite each other!
The 5 min chart in the $USD is in a leading positive position, it did not confirm the gap lower, again, this confirms what the signals are in GLD and suggests that pullback in the market I've been saying the last 2 days to expect.
Now the Euro which for confirmation should have the exact opposite signal as the $USD and the same as GLD.
The 1 min chart is seeing a negative divergence RIGHT NOW
Although the trend in the 5 min vhart is very strong and I have NO DOUBT the Euro , Gold, Silver and the market go higher, in the very short term (over the next few days or so) there's a negative divergence in effect so expect the Euro to come down with gold, silver and the market and fill part or all of the gap, the $USD to move up and fill part or all of the gap.
And how? Over the weekend all they have to do is say sentiment on Greece changed and there's concern which sent the Euro lower and $USD higher-SIMPLE as that!
And I thought today would be boring!
No comments:
Post a Comment