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Thursday, June 6, 2013

GLD and GDX 5/6

It has been a while since I checked in on GLD and GDX.  Lets start with the weekly GLD chart.

That was some sell off in GLD.  It is still struggling to even cross the 60 SMA.  Needless to say there would be a lot of work to do before it could sustain an uptrend.  Lets look at the daily chart.

I just don't see anything yet to indicate GLD is making a lasting bottom.  Since the April low the pattern looks more like an upside down cup and handle continuation pattern.  I saw a lot of these in the 2000-2002 bear market in various stocks.  Not so much in 2008 as the market crashed so violently.  The last couple of weeks look like a textbook handle.  If this pattern turns out to be real and GLD breaks down again it could take another good sized tumble.  The handle is about long enough now.  If the bearish case happens it should start down again very soon.  Price is hanging right around the 18 SMA.  An upside break could target the 50 SMA.  I don't have a good feeling for what it is going to do, but I think it is very near a decision point one way or the other.

Here is the weekly GDX chart.

GDX has made better progress then GLD.  It has crossed above its 6 SMA.  Is it looking to make a run to the 18 SMA?   Lets check the daily chart.

At least there is some big green volume bars on this chart.  That positive volume is completely lacking in GLD.  Despite all that bullish volume price has not really accomplished much.  It has for the most part traded sideways while the 50 SMA comes down.  They are going to come together pretty soon.  A break out above that MA could be somewhat bullish.  But remember the weekly 18 SMA is sloped down pretty sharply so it will likely be stiff resistance.  That is now in the 33-34 area.  I don't see enough here yet to give me any confidence that is going to happen.  That most likely depends on what GLD does.  Since GLD looks like it is near an important decision we may know more before too long.


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