Most Popular
1. Banking Crisis is Stocks Bull Market Buying Opportunity - Nadeem_Walayat
2.The Crypto Signal for the Precious Metals Market - P_Radomski_CFA
3. One Possible Outcome to a New World Order - Raymond_Matison
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
5. Apple AAPL Stock Trend and Earnings Analysis - Nadeem_Walayat
6.AI, Stocks, and Gold Stocks – Connected After All - P_Radomski_CFA
7.Stock Market CHEAT SHEET - - Nadeem_Walayat
8.US Debt Ceiling Crisis Smoke and Mirrors Circus - Nadeem_Walayat
9.Silver Price May Explode - Avi_Gilburt
10.More US Banks Could Collapse -- A Lot More- EWI
Last 7 days
Stock Market Volatility (VIX) - 25th Mar 24
Stock Market Investor Sentiment - 25th Mar 24
The Federal Reserve Didn't Do Anything But It Had Plenty to Say - 25th Mar 24
Stock Market Breadth - 24th Mar 24
Stock Market Margin Debt Indicator - 24th Mar 24
It’s Easy to Scream Stocks Bubble! - 24th Mar 24
Stocks: What to Make of All This Insider Selling- 24th Mar 24
Money Supply Continues To Fall, Economy Worsens – Investors Don’t Care - 24th Mar 24
Get an Edge in the Crypto Market with Order Flow - 24th Mar 24
US Presidential Election Cycle and Recessions - 18th Mar 24
US Recession Already Happened in 2022! - 18th Mar 24
AI can now remember everything you say - 18th Mar 24
Bitcoin Crypto Mania 2024 - MicroStrategy MSTR Blow off Top! - 14th Mar 24
Bitcoin Gravy Train Trend Forecast 2024 - 11th Mar 24
Gold and the Long-Term Inflation Cycle - 11th Mar 24
Fed’s Next Intertest Rate Move might not align with popular consensus - 11th Mar 24
Two Reasons The Fed Manipulates Interest Rates - 11th Mar 24
US Dollar Trend 2024 - 9th Mar 2024
The Bond Trade and Interest Rates - 9th Mar 2024
Investors Don’t Believe the Gold Rally, Still Prefer General Stocks - 9th Mar 2024
Paper Gold Vs. Real Gold: It's Important to Know the Difference - 9th Mar 2024
Stocks: What This "Record Extreme" Indicator May Be Signaling - 9th Mar 2024
My 3 Favorite Trade Setups - Elliott Wave Course - 9th Mar 2024
Bitcoin Crypto Bubble Mania! - 4th Mar 2024
US Interest Rates - When WIll the Fed Pivot - 1st Mar 2024
S&P Stock Market Real Earnings Yield - 29th Feb 2024
US Unemployment is a Fake Statistic - 29th Feb 2024
U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - 29th Feb 2024
What a Breakdown in Silver Mining Stocks! What an Opportunity! - 29th Feb 2024
Why AI will Soon become SA - Synthetic Intelligence - The Machine Learning Megatrend - 29th Feb 2024
Keep Calm and Carry on Buying Quantum AI Tech Stocks - 19th Feb 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold Market Trend Review, The Bull Bear Debate

Commodities / Gold and Silver 2010 Jun 30, 2010 - 05:54 PM GMT

By: JD_Rosendahl

Commodities

Best Financial Markets Analysis ArticleThere’s a lot of buzz about whether the gold market continues higher, or whether it’s time for a correction.  The short answer is both are still a viable option.

Below is the daily chart of GLD.  It’s grinding higher within a narrowing band of resistance and support trend lines.  It looks tired based on divergences on both the RSI and MACD.


A break out is surely coming in the near future.  A break below the red trend line is not terribly bearish, but a break below the black trend line is a more bearish signal.  That daily black trend line is also the trend line on the weekly chart below.

The weekly chart reflects bearish divergences on both the RSI and MACD, and volume has declined into recent highs.  That also looks tired based on divergences on both the RSI and MACD.

Below is the monthly chart of GLD.  The good news is the monthly MACD has made a new high recently with price, and no bearish divergence exists.  That leads me to believe the secular gold bull is still intact even if a near term correction begins.

The crux of the bull bear debate is essentially the following:

Melt ups occur from over bought conditions, especially in bubble conditions.  The monthly MACD currently allows for more time for this to occur.  Should GLD break above the daily resistance trend line a melt up could occur because there is no overhead resistance. 

However, should the monthly MACD roll over, a correction of size in price and/or time is due.  My down side targets are the monthly trend line, which is where the 50 month MA resides.  My secondary target is the red line, which is price support.  We haven’t visited the 50 month MA in ten years and it’s over due for a test.

Summary:  Based on the technical structure of GLD, the risk is elevated for a larger sell off compared to the prior correction.  The GLD simply looks tired.  Therefore, we have sold a third of our gold bar position, and a couple of gold stocks.  In essence, we have cut our total gold/gold stock position in half.  It’s simply based on elevated risk, and we manage from the risk side first, making money second.

If we get the melt up, we will choose a time to unload, which may require patience or an averaging out strategy.  If we get the self off or correction we look to average back into metals.  If it is the sell off, it will take the monthly MACD months maybe a couple years to reach the zero line where I want to re-enter the PM market.

By J.D. Rosendahl

www.roseysoutlook.blogspot.com

J.D. Rosendahl was a former stock broker/investment consultant (currently not licensed) before becoming a Commercial Banker for the past 14 years. He manages his family's wealth, helping them avoid the high tech bubble and the real estate bubble melt downs and preserving wealth.

© 2010 Copyright J.D. Rosendahl - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in