Friday, February 5, 2010

Gold - GDX and GLD

The Market Vectors Gold Miners, ticker GDX (weekly view chart below) has broken a longer term channel (purple) as well as the shorter channel (green). As my notes indicate the 13 and 34 week EMA's have not only been violated but have rolled over. Only the most tunnel visioned gold bulls would ignore this warning signal.

Note the heavy volume coming in the last 3 week weekly bars.

Next up we have the Gold spider etf, ticker GLD (weekly view below). This chart paints an equally troublesome picture. Market watchers know the stocks lead the bullion (due to their leverage) hence why bullion is the 2nd chart here.

GLD has broken the lower bound of the shorter term channel (green) along with the 13 week EMA with the 34 week EMA under assault. An oversold bounce is due but dare I say 780 to 810 is a legitimate target. If we do get there, lets hope the lower boundary of the long term channel (purple) holds as one may not want to think of the next target if that were to give way.

I realize the 'gold crowd', don't want to hear any of this but the charts are speaking. I know gold is money. I know gold has special attributes, most especially so in a profligate world, which is why I own the physical... fully paid for. I want to be wrong about all of this but......

Global de-leveraging is in motion and leads me to ask the following. Is a global 'garage sale', as everyone scrambles to raise cash, in the offing? I cannot help but think so, especially in the face of fundamentals and more importantly, these charts.

Good speculating to you all and please remember to never forget that "an investor is a speculator who made a mistake and will not admit it".

Open Positions:
Long 1 unit Direxion Large Cap 3X Bear ticker BGZ @ $19.34
Long 2 units Direxion Small Cap 3X Bear ticker TZA @ $12.06
Long 1 unit Direxion Emerging Mkts 3X Bear ticker EDZ @ $6.05
Long 2 units Direxion Financial 3X Bear ticker FAZ @ $19.65
Long 2 units Ultrashort Xinhua China ticker FXP @ $8.49
Long 1 unit Ultrashort Real Estate ticker SRS @ $9.82
Long 2 units Direxion Tech 3X Bear ticker TYP @ $10.52
Long 1 unit US Dollar Bull ticker UUP @ $22.52 stop @ $21.97
Long 1 unit Barclays 20yr bond ticker TLT @ $91.25 stop $89.33

Short 1 unit Daimler ticker DAI @ $52.23 stop @ $52.23
Short 1 unit CurrncyShr Aus Dlr ticker FXA @ $89.65 stop @ $91.71

No comments: