December 17, 2009
On December 3 we wrote; “Streettracks Gold (NYSE: GLD) closed at $119.10 on Wednesday, December 2, only a fraction below the ($119.98) resistance level and the target for the current rally. Streettracks Gold is now rising on momentum alone. This is dangerous territory”
Since that date Streettracks Gold has sold off and lost some 10% at its correction lows. On Wednesday December 16, Streettracks Gold rallied and closed at $111.59.
Is the correction over?
The declines closed below the 50% retracement level for the steep October 28 to December 3 rally and almost reached the 61.8% retracement level. This is right where we would be looking for strong support and a reversal and renewal of the advance.
Higher highs are likely with initial short term resistance at $114.13 and then $115.40. If Streettracks Gold clears these levels it should make a run for its prior highs.
On the downside, should Streettracks Gold close below its correction lows at $108.72; we could see a test of the October lows at $100.65.
Disclosure: The Fibtimer.com (www.fibtimer.com) ETF Timing Strategy holds a position in Streettracks Gold.