9:23 a.m., EST
Dow Theory; Sell signal nears
Gold, in Wyckoff ‘Up-Thrust’ reversal
Even though the current environment is anything but traditional, the report at this link shows how close the market is to a Dow Theory sell signal.
It could be. Even with valuations and markets at never before seen extremes, the traditional theory will still hold.
Wyckoff analysis, developed during the same time as Dow (published in 1910), does not concern itself with ‘valuations’.
That’s the key
Wyckoff discovered early on, that ‘markets have an energy of their own’.
This ‘energy’ has nothing to do with valuations.
Gold (GLD) has been discussed several times over the past few weeks; that it has stalled and in potential reversal.
The weekly chart shows the blue line resistance area. Price action has struggled at this location for weeks.
Now, with the market about to open, GLD is trading down a solid -2.5 points, or – 1.4%.
If that level is held to the open, it puts GLD below the June 3rd (weekly) low and below the resistance area.
With all the inflation, and hyperinflation talk, GLD has not made it to new highs.
Last week, the dollar reversal was confirmed with UUP posting a new weekly high. At the same time, weekly MACD confirmed its bullish divergence.
The stage appears to be set for some kind of surprise; in the markets, the dollar and gold.
Charts by StockCharts