“Sentiment Is Negative” … So What?
We’re going to address the bullish view briefly but succinctly, with the weekly chart of gold (GLD) below … but first.
When ‘Sentiment’ Works
One little trading nugget that took about 25-years to find out (your mileage may vary), was that in a sustained up or downtrend, sentiment is largely, irrelevant.
In the ZeroHedge report linked above, the ‘little guy’ (i.e. sentiment) is bearish or negative. We all know the little guy is nearly always wrong.
Not to worry.
If gold and silver move decidedly lower from here, our ‘little guy’ will think he’s a genius.
He’ll begin (or continue) to post all kinds of philosophical memes on twitter and Facebook; then set himself up for the big whammy farther down the road. 🙂
The pros will get their money no doubt; they’re patient.
Now, on to the weekly chart for gold (GLD).
Gold (GLD), Weekly Close
We’ve already discussed how penetrating support will put gold (GLD) in Wyckoff spring position.
It’s clear we are there now.
As it says in the chart, support penetration was preceded by a very weak bounce.
The difference between Wyckoff analysis and others is that Wyckoff focuses on what the market’s saying about itself.
At this juncture, price action to the upside (the bounce) is weak; suggesting that momentum remains to lower levels.
The following chart is a zoom of that bounce area.
This update’s several hours before the 2:00 p.m., EST, Fed announcement … likely to be a non-event, anyway.
Nonetheless, if there’s a significant change in price action, we’ll review it at that time.
Charts by StockCharts
Note: Posts on this site are for education purposes only. They provide one firm’s insight on the markets. Not investment advice. See additional disclaimer here.
The Danger Point®, trade mark: No. 6,505,279