Wednesday, June 26, 2013

GLD Gold ETF Weekly and Daily Charts Descending Triangle Potential Island Reversal Falling Wedges Oversold Positive Divergence

Anglo-American news overnight is slamming the commodities across the board. Gold and silver are down and may set up a capitulation day of selling where even the die-hard long holders throw in the towel and give up. Note that gold is near 3-year lows. GLD charts indicate that bottoming action is preferred moving forward with a base forming and recovery despite all the negative media. The weekly chart shows the blue descending triangle (a bearish pattern) where price collapsed through the 154 base line. With a top at 186, that is a vertical side of 32, which targets 122. Looks like price is there today satisfying the ominous triangle pattern. The weekly chart is also positively diverged, with a green falling wedge, and oversold RSI and stochastics, all systems go for a recovery moving forward, although it will take patience over the coming days to stand firm for the long side. The MACD line remains negative so this will create a downward price move after a bounce occurs so there is likely one to four weeks of basing ahead and then a much stronger push higher.

The daily chart is positively diverged over the last two months, with falling wedge behavior, and oversold conditions also pointing to a price recovery moving forward. The MACD line and money flow show some further downside momo in the VST time frame and this morning is on tap for a push lower. The daily chart also shows that price is on an island now after the gap-down from 131 to 126. Thus, when price comes back up an island reversal would be on the table for a potential gap-up from 126 to 131, or, price will simply venture upwards and fill the large gap. Commodities and metals are bludgeoned this morning but the charts above say the worst is over and a basing and recovery period should follow along. This information is for educational and entertainment purposes only.  Do not invest based on anything you read or view here.  Consult your financial advisor before making any investment decision.

Note Added 6/27/13 at 8:05 AM:  Commodities were bludgeoned yesterday. Gold and silver long players jump out of windows. Doom and gloom in metals across all media--typically a sign of a bottom. GLD dropped like a stone to a LOD at 118.06 and closing print at 118.28. Keystone's 80/20 rule says 2's typically lead to 8's so once the 122 was violated this hints at 118--and all this occurs on one day's action! The downside momo will need to burn off but the same analysis holds moving forward with metals expected to base and recover from here forward over the near to short-term.


  1. Great gold analysis Ks, this is a dramatic time, after all the gold bashing to "1000" lets's see where the bounce will come. I have been trading the miners, some days good some days bad, but now am looking obviously to take a position with the trigger finger itchy very very soon. thanks for the chart.

  2. On gold weekly chart you can see the same descending triangle with top at 1900 and 1550 base line. That is 350 difference so gold has a 1200 target which corresponds to GLD's 122 target. Gold was printing 1233 a short time ago so both are where they should base now since the ominous triangle has played out.


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