Gold / GLD Update

Again I have quite a few emails about GLD (gold) and gold miners which I will get to next, I just needed to be sure the data gap is not a problem and what timeframes I need to be careful with.

Essentially the Gold Update (and GDX/gold miners, have a tight correlation with gold) is unchanged.

I have expected a pullback in gold which we saw for a good part of last week, while the overall larger trend remains bullish.

I did warn specifically about short term action as follows,

"Not too much has changed in the assessment for both, but there is a decent chance for some misleading activity and a decent chance for some trades if you are pretty aggressive."

In saying "misleading", as you know few things in the market move straight up or down so even in the gold pullback, I expect a short term bounce and that is what I think may be construed as misleading.

In a GLD pullback we want to see accumulation of a pullback for a longer trend position (long) gold/GLD and this will likely effect GDX/NUGT the miners as well.

Here's what we have in Gold/GLD...

 This is YG (Gold futures) 1 day, the positive divergence is part of the larger, longer term uptrend I believe we will see in gold after a pullback completes with confirmation of a positive pullback via positive divergences through the pullback.

 This is the gold futures 60 min chart showing clearly the pullback we have expected in gold and we have seen thus far, I do believe this pullback is not over, but likely to see a small counter trend (pullback being the trend) bounce, this is what I was referring to above as "Misleading activity" as it may look like the bounce in Gold is complete before it is. I also thought/think a gold bounce is tradable, but it is a more aggressive trade.

 This 15 min gold futures chart has no data loss in it at all so that's not an issue, it does show what I suspected last week long before we had a divergence like this which is positive from about late Thursday through the present.

I do believe this will likely see an upside, shorter term move, I'm not very interested in trying to trade it as I believe the larger trend that should continue to unfold is the larger, most probable and safest trend.

However I will watch this very carefully as gold is a QE sensitive asset and it has not been that long since last Wednesday's F_O_M_C, however since then gold has been trading in a manner in which would suggest elements of the market are bearish on QE and continuing QE or perhaps it's ability to effect the market positively.

 The 30 min 3C GLD trend represents the larger trend (up) in GLD, you can even see on the pullback starting last week that the chart does show the first hints of accumulation in to the pullback as we wanted to see.

The 15 min GLD chart shows clearly the area of a negative divegrence that is confirmed by gold futures and this is the "pullback" expected in Gold/GLD that has materialized since we first expected it.

However once again you can see some small/shorter term positive divergences on this chart as well. Part of this may be for a counter trend (short term bounce), but I suspect some of it as we see above on the longer charts that would not reflect a bounce, and that would be a constructive pullback or accumulation in to lower prices as expected.

The 5 min GLD chart (and right now I don't want to use a chart too much shorter until more data from this morning's blackout, is filled in) shows the activity that I termed as potentially "Misleading" and that would be a signal for a counter trend bounce within the pullback which is actually quite normal and probably tradable, however it's important to remember what the highest probabilities suggest, it looks to be a short term bounce/consolidation and thus has the potential to be misleading especially since counter trend bounces are typically very powerful as they need to be believable.

I'll continue to wait on a continued gold/GLD pullback to enter a longer term position (long) which I believe will be stronger than a bounce or even a swing trade.

I'll check in to GDX/NUGT and DUST in case some are interested in using the 3x leveraged ETFs to start a position.

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