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Gold Has Reached Bottom Of Short Term Channel

|Includes:GDX, SPDR Gold Trust ETF (GLD)

While I believe that the bottom that gold made when it momentarily broke under $1200 at the end of June was a significant bottom, I recognize that trading opportunities will arise as it generally works its way higher over the short term. I wrote a technical piece about gold having reached the top of a short term channel on Invested Central in late August. I like to trade gold through the gold etf (NYSEARCA:GLD).

Since that time gold has dropped from roughly $1425 to $1360, a pullback of roughly 5%. GLD has returned to the bottom of its upward sloping channel:

Based upon this chart, I liquidated my short term trading position in GLD late in August, as well as call options that I held in the gold miners etf (NYSEARCA:GDX). I believe the correction has now run its course. On Monday (9/09/13) I intend to re-establish a short term trading position in GLD via in-the-money calls with an October expiry.

Disclosure: I have no positions in any stocks mentioned, but may initiate a long position in GLD over the next 72 hours.

Stocks: GLD, GDX