Pushing Past Resistance

Measured Moves

Overlapping Price Action

Gold (GLD) has pushed past prior resistance and is now hovering at the 177.00 – 177.50 level.

International tensions are the usual excuse for the metal’s move but has it really done anything out of its recent norm?

This is a good time to see what the gold market is saying about itself.

Gold (GLD) Daily Chart

We’re going to use a somewhat compressed version of GLD. The reason for that will become apparent.

Starting with the un-marked daily chart below:

First is the obvious Wyckoff up-thrust (potential reversal) condition.

Price action has pushed past resistance and is now hovering at the 177.50, area … as if unsure what to do next.

GLD can come back and test on its way higher; it can come back, test and fail into a downside reversal.

The next chart is where it gets depressing for the bulls.

Price action in GLD, shows the current rally’s distance, is no different than it’s been for at least the past year.

We’ve highlighted the most recent move in blue and then moved that same line back to prior moves of nearly the exact same distance (magenta lines).

So, gold’s not doing anything out of the norm (so far) that it hasn’t done already.

Note how the entire twelve months shows price action as choppy and over-lapping.

This type of deep retracement action is characteristic of a countertrend move … that is, gold moving higher in choppy action is actually counter to its main trend … down.

Summary

With the dollar moving higher and the continued possibility of gold/dollar inverse correlation, somebody’s likely to reverse … soon.

The dollar’s been in a year-plus long upside reversal. The weight’s on the gold bulls to prove the dollar/gold inverse correlation is disconnecting.

Stay Tuned

Charts by StockCharts

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