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Checking In On Our SPDR Gold Trust ETF (GLD) Trade Setup

April 29th, 2013

buy-and-holdIn last Friday’s commentary, we highlighted SPDR Gold Trust (NYSEARCA:GLD) as a potential short entry as it bounced substantially off its recent lows and into near-term resistance. Specifically, recall we were looking for a short entry if $GLD fell below the prior day’s low.

Although $GLD did not trade below the prior day’s low on Friday, it came within 25 cents (0.2%) of doing so. Going into today, the trade setup still looks quite good. In fact, a short entry into $GLD is now a slightly lower risk entry point because the ETF “overcut” resistance of its 20-day exponential moving average on an intraday basis, then closed well below it AND in the lower third of its intraday trading range. This is shown on the updated daily chart of $GLD below:

$GLD overcuts its 20-day EMA on the bounce


With this swing trade setup, we want to clarify that we are NOT necessarily expecting $GLD to make another leg lower within its current downtrend. Rather, we are merely anticipating at least a retest of the April 15 low (such as an “undercut”) before $GLD stabilizes and tries to make any type of significant move higher. As such, note that our projected holding period of this momentum trade setup is expected to be shorter-term than our typical ETF swing trade.

Also, please recall that our actual trade setup on the watchlist is to buy the inversely correlated DB Gold Double Short ETN (NYSEARCA:DZZ), rather than selling short $GLD. This is simply because many Wagner Daily subscribers have non-marginable cash accounts, such as an IRA accounts, that prohibit short selling of any kind. Nevertheless, we are basing our entry and exit points on the actual chart of $GLD, rather than $DZZ, to ensure the most accurate tracking to the price of spot gold.

Another ETF we have recently been stalking for buy entry (and returns to our watchlist today) is Guggenheim China Real Estate ETF ($TAO). This bullish, intermediate-term trend reversal setup is shown on the daily chart of $TAO below:

$TAO trend reversal setup

Initially, we were looking to buy $TAO on a pullback to its April 19 low, which hasn’t happened yet. However, the 20-day exponential moving average just crossed up above its 50-day moving average two days ago, which is a confirming signal of a bullish intermediate-term trend reversal. Because of its long-term uptrend (on the weekly chart), the 200-day moving average continues sloping steadily higher as well. As such, the trade setup remains solid. Subscribers to our swing trader newsletter should note our preset trigger, stop, and target prices for $TAO on the “watchlist” section of today’s report.

Learn the Top 5 Trading Rules of Deron Wagner, founder of Morpheus Trading Group, by visiting http://www.toptradingrules.com today.


NYSE:GLD, NYSE:GLL


 

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  1. paulos
    April 29th, 2013 at 12:47 | #1

    Gold will surely test bottom again, and then go up and then get hammered down to near 1000. This is a Fibonacci retracement from its 1900 high in 2011. Plus the fed wants you to buy bonds in time of a crash, that is why they are doing this to gold – to secure the us govt’s debts with bonds which otherwise seem less attractive.
    But your best hedge is not gold or bonds but farmland which goes up exponentially with time, offsetting tax costs. And besides, you can’t eat gold…

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