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

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 today.

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