If you would like an email sent to you when I update the blog please send an email with "subscribe" in the subject line to traderbob58@gmail.com. To be removed use "unsubscribe".

Search This Blog or Web

Wednesday, October 10, 2012


Time for an update on the GDX and GLD now that we have had some time to price in the latest QE.  Lets start with the weekly GDX chart.

The yellow lines used to be red for resistance and were derived from the topping formation in 2011.  Since GDX blasted through both of them they could now become support.  Since that theory has not been tested yet, I changed them to yellow.  The green line is potential support derived from this rally.  GDX has moved back up into the top formation.  Usually there is a sell reaction when that happens.  There are two back to back hanging man candles on this chart.  Does that signal a pullback coming?  Lets zoom in to the daily chart.

I circled the areas on this rally where the green support line came from.  Price has dropped out of the trend channel that contained this last leg up.  That should mean we are in consolidation or pullback mode.  Does it go sideways or test the support lines down below?   I have stated before I never understood the fundamental reasons for the big crash.  Are they over with or not?  There was good positive volume in both legs of this rally.  The 50 SMA is crossing above the 200 SMA, the so called golden cross.  It seems like most of the time when that happens there is a pullback.  The price pattern kind of looks like a short term top as well.  I am going to venture a guess that GDX will pullback into the area of the lower support lines and 50 and 200 MAs. 

Here is the weekly chart of GLD.

GLD did a moonshot up to the area of the last two peaks marked by the red resistance lines.  It broke the longer term down trend line to say the least, LOL.  Lets zoom in to the daily chart.

This rally has a bit of a parabolic look to it.  That kind of move is notoriously fickle.  Will there be a temptation to take profits or will people just want to let it ride?  Remember we just hit a prior resistance area.  GLD also experienced a golden cross a couple of weeks ago.  The price structure really has not created any clear support areas down below.  There is not much there except for Fib levels and MAs.  This looks like a chart ripe for a pullback.

Both these charts look like any pullbacks should be buying opportunities.


No comments:


The information in this blog is provided for educational purposes only and is not to be construed as investment advice.