June 28, 2011
The daily chart for Streettracks Gold (NYSE: GLD) has broken down and is forecasting lower lows.
Only two weeks ago we were watching a potentially bullish pattern play out. GLD was tracing out a pennant pattern and pennant patterns typically break in the direction of the previous trend, in this case the trend was up.
On Thursday of last week GLD broke out of the pattern but to the downside. The trend is now down and Monday’s trading confirmed the new trend with another loss.
In our timing strategies we have a gold stocks strategy that turned bearish back in early May. Since that date gold stocks have continued to slide lower while, until recently, gold bullion had held close to its highs.
This was a divergence and divergences are typically bearish. Now gold bullion is following gold stocks lower. The divergence appears to be ending.
There is support at the May 5 closing low of GLD 143.47. After this the next support is down at $136.
http://www.fibtimer.com does not currently have a position in Streettracks Gold.