Gold Update

Let me stress this is not a precious metals update including silver and it is not a gold miners update, only gold which we re-opened a short positioning after a quick 2.5 hour successful trade on some of the strangest signals I have seen in any asset and incredibly accurate, that was Trade Idea (speculative) GLD / DGLD and the new position opened since was from November 19th, Trade Idea: (Speculative) Re-entering GLD Short via GLD

The current GLD short is down -.40%, which isn't anything of concern at the moment.

Gold is typically bought on  inflation expectations, you probably know from the last several weeks/month of news flow, there has been Central Bank concerns of deflation from the US to Europe to Asia. While most say they believe this to be a short term minor trend, some near term downside in gold makes sense for a couple of reasons, of course the above being one and the second is between the long term Gold trend which we called a top in during the highs of 2011, that was very unpopular with gold bugs and expected to be an Intermediate to primary downtrend, there have been signs over the last 6 -12 months that gold may be trying to carve out a base of some significance along with miners. Of course there are numerous under-currents in the gold debate in which pulling on one string unravels another, I can't make the fundamental argument and don't care to , especially after seeing the last couple of months how involved at least the F_E_D is in the market as Bullard has demonstrated not only on the upside, BUT ON THE DOWNSIDE AS WELL, the common thread being SMART MONEY WAS ALREADY IN PLACE FOR EITHER DIRECTIONAL MOVE BEFORE THE F_E_D CATALYZED THE MOVE (THIS LAST FEW TIMES VIA BULLARD), meaning fundamentals are much less important and following the money is.


Here are the GLD charts and what I believe are signals that support at least a swing short in GLD.

 This is a VERY long term 3C chart, multi day which shows confirmation on the Quantitative Easing Gold Uptrend through 2011 when we noticed there was a significant change in character and the leading negative 3C chart since then and as predicted in 2011, gold has entered a primary downtrend, however this does not mean a change is not in the works, especially looking at the head fake as a macro concept below a large descending triangle which actually has no bearing or validity as a consolidation/continuation pattern as it is far too large, but any support for a base would be at the low end of price and at supply below the support of that "bearish" looking triangle as we are currently in place.

Any base that may be under development as I would say is a VERY high probability, would take some time before showing up on a chart this long, this chart reflect the 2011 prediction at the gold top of a primary downtrend.

However a weekly chart of gold futures shows something different that we wouldn't see on the chart above just yet that does suggest gold could easily be making a base as GDX/Miners have shown us over a year-plus period.

 The negative divegrence at the 2012 highs continuing the primary downtrend which is confirmed by 3C until late 2013.2014, the same as GDX/Gold miners.

The yellow arrow is where GDX/GLD tried to breakout of the year long inverted H&S base, where we sold as we expected that to fail and both assets to pullback to gather further strength for a final push through base resistance, IT APPEARS THAT IS HAPPENING LONGER TERM, BUT GOLD HAS SOME MORE DOWNSIDE UNTIL IT HITS THE RANGE OF THE BASE.

 GLD'S 30 min chart and one of the reasons for the most recent "SWING" GLD short from above.

The negative sent prices lower to the left, the positive in the middle sent them higher and since a new negative has formed, this is what the current GLD (short) swing trade is based on.

GLD 15 min uptrend confirmation of the previous positive divegrence and a negative divergence in to the recent highs, again reason for the current GLD short swing trade.

 And intraday GLD 1 min has seen a couple of negatives leading it lower locally and a current leading negative that should continue to lead it lower and the GLD swing short to a gain,

As for Gold futures, they too have information/confirmation to add, above and beyond the probable longer term base being worked out.

 60 min previous positive mentioned and following move higher in to a recent negative divegrence at gold's range,  ranges are seemingly "dull" areas of trade, very frustrating for most traders ass they tend to produce whiplash long/short signals , causing multiple failed/stopped out trades, BUT THESE ARE ALSO SOME OF THE BEST AREAS FOR 3C SIGNALS TO DEVELOP AS LARGER ORDERS ARE FILLED AT AN AVERAGE PRICE, thus the reason for the range.

Note the current negative divegrence which is the reasons for the GLD swing+ short position.

The 30 min gold futures also shows the same negative divegrence at the same range/local highs, thus I believe the move is just getting under way, a fairly tight stop can be kept in place from here.

 And the more detailed 7 min (timing) chart with a near perfect negative divegrence in to recent highs from last week with a leading negative divegrence.

The 5 min chart shows the same.

So for now, until GLD enters the area of approximately $109-$110, I believe GLD short will likely be the strongest trade, once at the levels mentioned, this is where to look for a continuing base building set of divergences in gold, probably silver and certainly gold miners as they seem to be taking on their pre-QE role of leading gold as we have seen over the last several months numerous times, a relationship UTTERLY DESTROYED during QE, but very popular before QE.

I think GLD is still in a decent area for a short swing trade (maybe then some).