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With geopolitical tensions in the Middle East providing blowhards more “Black Swan” material, the price of gold and its ETF, GLD, acted as safe havens on Friday’s equity sell-off. Nonetheless, a look at the daily chart of the key ETF offers a bearish setup, as emotional investors flocking to a perceived area of safety could easily be poised to fall into a vicious trap. As you can see on my annotated daily chart of the GLD below, this current bounce is merely serving as a gap fill back up to a key breakdown point from a major support level on heavy selling volume. Moreover, we now have a declining 20 day moving average, not to mention a 50 day on the cusp of following suit.
In sum, beware the knee-jerk reaction of rotating into gold after watching the instability in Egypt, for it is set up to be a whole lot more dangerous than you think.
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Good call! have set orders in the 125 range
That may be a tetch too low, but you never know.
Safer at 127.
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Silver though showed that there may be much more to this on friday. Smart to watch should resolve next few days.
Yeah, Silver was more impressive on Friday to me.
Silver can only go so far w. out gold, albeit leading more these days (which is TRES unusual).
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The 150 day has been the bounce point when the others faild to hold and that is where it found support this dip too. So that is what I would watch.
Good point, and just below that 150 day is the 200 day. Looks like this could set up for a lot of back and forth.
Thanks Chess, your analysis appreciated. Find your videos and TA very helpful in 12631.