Gold (GLD) Pullback May Mean The Opposite Of What You Think

A trader needs just to look at the weekly chart of GLD to understand what is going on in gold.

GLD has been in a bullish uptrend since October of 2008. October of 2008 was when the U.S. government did a $750 billion bailout of its major banks. It is also the month that Britain did a $68 billion bailout and Germany announced a blanket blank deposit guarantee for all deposits. So with governments around the world printing currency to bailout their financial institutions it makes since that currencies were diluted and gold became a safe retreat.

That 20 month uptrend in GLD has 10 points of contact touching the trend line I illustrate in the video. If you watch my technical analysis videos you will understand that I am especially serious concerning having at the very least three points of contact when drawing trend lines. The additional points of contact on the trend line, and the longer the trend has kept, the more essential that trend line gets.

The important mark to keep in mind is 113. SPDR Gold Trust ETF (GLD) is at this time in a short term down swing on the weekly stock chart. I feel that GLD is headed back downward to test this 113 level. SPDR Gold Trust ETF (GLD) is in a powerful uptrend and so at this time, I feel that GLD will bounce off the 113 level.

There are several ways you can play this 113 trend line. I suggest that if you are waiting for a pullback in gold to buy the precious metal or mining stocks, then you will want to enter a long when SPDR Gold Trust ETF (GLD) is around 113. Conversely, if the 113 level is broke, you should book your gains and go to the sideline for the reason that the 20 month uptrend line will be broke.

You might be pondering how can you know to buy off 113 versus selling if this level is taken out? When 113 is hit, you want a verification week of the spring up off 113. After you get that verification week, you are able to enter your long. If the verification week is a doji, then push verification out one more week.

The important thing to have down pat is that in a market sell off, GLD will be pulled down as well. The variance is that GLD will not be taken down as low as the rest of the stock market.

In the video below, I perform technical analysis on SPDR Gold Trust ETF (GLD) by means of only a weekly chart and I explain to you the all important 113 level you should watch.