Gold Technical Charts For July 2010
One needs just to study the weekly chart of SPDR Gold Trust ETF (GLD) to comprehend what is happening in gold.
SPDR Gold Trust ETF (GLD) has been in rally ever since October of 2008. October of 2008 was when the U.S. government did a $750 billion bailout of its chief banks. It is also the month that Britain did a $68 billion bailout and Germany announced a blanket blank deposit pledge for all deposits. Thus with governments throughout the world printing money to bailout their monetary institutions it makes since that currencies were diluted and gold became a less dangerous haven.
The over 19 month bull run in SPDR Gold Trust ETF (GLD) has 10 points of contact touching the trend line I draw in the video. Provided you watch my technical analysis videos you will understand that I'm very critical about having at the very least 3 points of contact while drawing trend lines. The more points of contact on the trend line, and the longer the trend has held, the more essential that trend line gets.
The significant mark to keep in mind is 113. GLD is currently in a short term down move on the weekly chart. I gamble that SPDR Gold Trust ETF (GLD) is headed back down to test this 113 mark. GLD is in a strong uptrend and so at this moment, I believe that GLD will rebound off the 113 trend line.
There are a couple of ways you can play this 113 mark. I suggest that if you are waiting for a pullback in gold to buy the precious metal or mining stocks, then you will wish to enter a long when SPDR Gold Trust ETF (GLD) is around 113. On the other hand, if the 113 level is taken out, you should book your profits and move to the sideline because the 20 month uptrend line will be broke.
You might be asking how can you know to buy off 113 versus selling if this level is broke? When 113 is hit, you want a verification week of the rebound off 113. Once you get that confirmation week, you are able to enter your long. If the verification week is a doji, then push verification out an extra week.
The significant thing to bear in mind is that in a stock market sell off, SPDR Gold Trust ETF (GLD) will be pulled down as well. The variance is that GLD will not be pulled down as low as the rest of the market.
In the video below, I execute technical analysis on GLD with only a weekly chart and I explain to you the critical 113 mark you need to keep your eyes on.
Article Source: FxTradingStock.com
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by: Sam Stoker
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Date: Thu, 15 Jul 2010
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