March 4, 2010
Shares of the SPDR Gold Shares (NYSE: GLD) have been rallying this past week but have now reached levels where we can expect sellers to enter the market.
When Gold Shares rallied back in early January, the $112 level stopped the rally and Gold Shares continued lower for a month.
Now Gold Shares are back at this same resistance level, closing Wednesday, March 3 at $111.63 a share. The $112 level is also the 50% retracement of the December to January sell off, so short sellers will be watching for any sign of weakness to enter the market and help push prices lower.
Of course maybe the second time will be the charm. Gold Shares will then immediately be faced with another strong resistance level, the Fib 61.8% retracement for the December to January decline at $114.10.
So $114.10 is the number to watch. A decisive close above this level would point to a new run to the December $120 highs. A failure at $114.10 would likely lead to a period of lower lows or at least sideways trading.
Kollar is editor and chief analyst at FibTimer.com (http://www.fibtimer.com) which offers market timing strategies for S&P and Nasdaq index fund traders, as well as bond, gold, small cap, sector, ETF and stock trading strategies.
Disclosure: No position