Here’s my take on gold ($GLD) (August 11, 2020)
GLD
I want to look at Gold ( NYSEARCA: GLD ) here. This is not a buying opportunity; if you look at the weekly chart this is like a bearish engulfing pattern x2. It really completely erases the last 2 weeks of trading in here. See, this box completely engulfs the last couple of weeks.
This is of type of thing that when it does happen it’s a pretty powerful signal. It’s not foolproof by any means. For example, you look at this here, you have got kind of the same thing, not quite but you have got kind of the same thing but here’s the difference: This thing was real close, in fact, it fell to the 200-day moving average. Here we are way above that; we are way above the 200-day moving average.
So my suggestion, this is really easy, my suggestion is don’t do squat on this. This is twice than average volume in the stock. Wait for the stock to get down to 170.00 or so and then still do nothing. You need to let Gold ( NYSEARCA: GLD ) rest. There are a lot of gold bulls out there who are talking about the Fed, inflation, this and that and the other thing.
And then Paul Krugman, I never read his crap but I saw a headline where he says Gold ( NYSEARCA: GLD ) isn’t up because of inflation it’s because of something else. I personally feel my IQ drop by 5 points whenever I read anything that lemming says. But the point is, and there is a point to this, everybody has an opinion on Gold ( NYSEARCA: GLD ). Everybody has an opinion about why it’s up so much. They will have an opinion of why it’s down right now.
What I am telling you is, let this thing fall down. Or let the 50-day moving average catch up; realize that the uptrend is still intact but this is not the time you want to own Gold ( NYSEARCA: GLD ). I would rather not own Gold ( NYSEARCA: GLD ) here at $180.00 and then buy it back in November at 185.00; because I think that between now and then, you literally get this kind of thing and then, hopefully, Gold ( NYSEARCA: GLD ) will start moving up.
So to me, it looks like the best part of the party is over. Again, I am not saying Gold ( NYSEARCA: GLD ) is just going to go down, let’s not misunderstand. I am not saying this is done, this is the peak and now Gold ( NYSEARCA: GLD ) is going to fall back, break through the 200-day moving average and that’s all. I could very well do that. I am talking more about what not to do.
What not to do is, don’t get sucked into this and buy it. You can always buy it later. But when there is more risk to the downside of the red box being filled than there is risk to the upside where the stock could come right up here this is something that I want to stay away from. I want to wait and see where the stock is to a point where when it starts to move up a little bit I can say, “Well, I think the stock can come in and fill this entire box.”
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