From Mike Hammer: Some technical traders took victory laps over the weekend, while others were checking central bank plans. Here at Gold Enthusiast HQ the weekend was more about relaxing after 4 fast-paced weeks, and now we’re back to looking at charts, reading the news, and seeing which way the collective wind is blowing.
The current chart is pretty straightforward. Here’s our old friend GLD in a 3-month view.
It’s pretty obvious where resistance was, and where support now is. The gap in between (in case you’re wondering) is traditionally termed “resistance” whether we’re looking at a gap up (this case) or a gap down. Dropping down through such gaps is almost always a bad thing for bulls…
As for the news, well, there’s plenty on both sides. Economically nothing really changed over the weekend so all the reasons to be distressed are still there.
Amidst all this gold looks to be starting the week right where it ended off – slightly weak in trading, but not dropping any more in premarket. We’re looking for gold to hold in the 1420 area until there’s a reason for it to rise. If no reason emerges over the next 3 days, traders’ attention spans will expire and we’ll likely see a gradual drift down to 1400.
The Gold Enthusiast
DISCLAIMER: The author is long the gold sector via small positions in NUGT, JNUG, a few junior miners, and covered calls on part of the NUGT position. He is watching for trades either way in NUGT, but has no plans to trade the other shares in the next 48 hours.
The SPDR S&P 500 ETF Trust (SPY) was trading at $297.74 per share on Monday morning, up $0.57 (+0.19%). Year-to-date, SPY has gained 12.02%.
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