Thursday, May 27, 2010

Gold - Is The Bull Market Weakening

Above is a weekly chart of the SPDR Gold Trust(GLD) and in the lower panel is the MACD indicator. The first thing I'd like to point out is that gold had a bearish engulfment last week which has NOT been confirmed. Silver (SLV) also had a similar pattern as well.

In the lower panel you'll notice that on the last move up in gold, the MACD is showing a very clear bearish divergence. I think the fact that we are seeing a weekly bearish engulfing pattern COMBINED with a MACD divergence is a cause for concern.

As of right now the uptrend is still intact and the bearish divergence as well as the bearish engulfing patterns have NOT been confirmed. I repeat... NOT CONFIRMED. The reason I am posting this now is because I feel that gold and silver are vulnerable and that we should not get too comfortable with the long side.

The SPDR Gold Trust (GLD) closed at 118.69 which was up .22 from yesterday's close. I'll keep you posted if I see any changes take place.


Anonymous said...

Good points. I totally agree. This is why I did not reopen my gold positions after I liquidated at the top in mid may. The gold will go up eventually, but I'm afraid will go lower first. My current sentiments readings in gold are multiyear high, that usually correlate with major or intermediate tops.
It's instructive to see what happened to gold after march 2009 when the fear subsided.

Culver said...

Platinum's also showing weakness...


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