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Bruce Powers
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Bruce has been involved in the financial markets for over 20 years as a trader, analyst, trading educator and financial writer. Core expertise is in the areas of investing, trading, technical and fundamental analysis, as well as corporate development and strategy. Bruce writes a weekly column... More
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  • Is GLD, Gold ETF close to a temporary top? 1 comment
    Oct 11, 2010 7:24 AM | about stocks: GLD
    Based on Friday’s close of $131.66, the SPDR Gold Trust ETF (GLD) has rallied $18.58 or 16.5% from its recent swing low of July 28, 2010. Although, not clear yet, it looks like it’s starting to run out of steam and maybe getting close to a more significant retracement than seen in the past couple months.
    GLD ETF Bearish Engulfing Pattern

    Last week GLD created a large Bearish Engulfing reversal candle on Thursday, October 7, on very high volume - the highest since early May 2010.

    This short term bearish behavior was exhibited as GLD broke through the top of a narrow and well formed channel of the current uptrend, and potential resistance of the confluence of two Fibonacci extension measurements of 161.8% each (light blue and violet on accompanying charts). The range of the day fully engulfed the candles of the previous two days and partially filled the gap from Tuesday, October 5! 
    GLD ETF Daily Chart
    Although Friday’s price action held support of the upper channel and Fibonacci extensions, further selling pressure is now likely in the near term given the intensity of this bearish engulfing pattern. 

    Also, take a look at Wilder’s RSI on the daily chart. The indicator has turned down after hitting an oversold level not seen since the swing high in early December 2009.
    GLD ETF Weekly Chart
    In the bigger picture seen on the weekly chart GLD is still showing strength. Wilder’s RSI is rising and volume has been increasing. If GLD breaks through and holds the high of Thursday, then maybe the bulls will win this one, otherwise, proceed with caution.  (www.etf-portfolios.com)



    Disclosure: no current position
    Themes: Etfs, exchange traded funds, bearish etf, chart analysis, etf chart analysis, etf reversal, etf technical analysis, etf trend analysis, gld, gold, overbought etf, spdr gold trust, technical analysis etfs, bearish engulfing pattern Stocks: GLD
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    Maybe but for me gold is no longer making sense.
    I don't understand why gold would be up when dollar is up?
    11 Oct 2010, 12:07 PM Reply Like
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