Is now the time to buy Gold? $GLD – April 23, 2024
This is Scott at StockMarketMentor.com with your Chart of the Day. I want to take a look at the Gold SPDR ( NYSEARCA: GLD ).
The big question is, is the pullback here in Gold ( NYSEARCA: GLD ) a buying opportunity? And the short answer is, not yet, so you can click off the video if that’s enough for you. But I’m going to tell you why I don’t think it’s a buying opportunity just yet. As it stands right now GLD ( NYSEARCA: GLD ) has constantly just made lower highs ever since this big reversal bar from April the 12th. We had a higher open, a run-up, and a flush down. Dan Fitzpatrick calls that a shot across the bow, it’s just a candle that you want to be careful about.
We actually had a shot across the bow in the S&P 500 ( INDEXSP: .INX ) the other day, you can see it right here. This candle right here would be considered a shot across the bow because we had a higher open, a lower close. It blew through both of these key moving averages, did it on higher than average volume and ultimately led to lower prices.
Back on Gold ( NYSEARCA: GLD ), we have a shot across the bow right here. A higher open, a lower close, and big volume. Now, on this day here it didn’t actually close below the ADMA so you still had an opportunity, where maybe it wasn’t what we think it is.
But now we see Gold ( NYSEARCA: GLD ) is lower and in and around this blue line, that’s the 21-day exponential period moving average. Ever since this day it’s been unable to make a new high, and we typically want to trade things that are making higher highs and higher lows, and they have to make both of those, just one isn’t that great.
We want higher highs and higher lows, we don’t just want higher lows and lower highs. That typically means something else, usually, that can mean consolidation. We want to see higher highs and higher lows, and this chart doesn’t have that just yet. So what I would do, if you are itching to get back into Gold ( NYSEARCA: GLD ), is set an alert.
I want to see this get above and stay above this weekly high of around 217.00. It’s got to get above that level, hold above that level, and ideally do it on volume. Now, that would signal a potential trend change out of this active sequence that it’s in right now. If I zoom out to the weekly chart we can actually see this could come in a little more. I would expect more consolidation on this just because it did make a lower weekly low. And again, we want higher highs and higher lows. And if it makes a lower low it typically can lead to the probability of more consolidation.
The gold bugs are going to hate me because I think it could come back a little farther here. If I zoom out to the weekly chart I would love for a pullback on this to around 195.00, even just around the 190.00 level, which is down a lot from where it is right now.
But if this could backtest in this zone, I actually think that could be a good longer-term entry because if I zoom out we can see a big cup, a big handle, and then a breakout. And what typically follows a breakout is a backtest of that breakout.
For those of you who have been trading for a while, this probably sounds like something you’ve heard a 100 times, but you don’t always need to buy the initial breakout, you can actually buy the backtest if we do get a backtest of this move all the way back down here.
Now, Peter Schiff is going to be crying if that happens. But if it does, I actually think that’s going to be a better long-term entry than trying to mess with it while it’s up here elevated above these moving averages.
Now, of course, this entry up here that I laid out initially, could definitely work. If it makes a new daily higher high and gets above the 8-day, maybe this is going to firm up just fine. But a lot of times, as long as we’re under the 8-day and chopping around, that can lead to paper cuts. I would look for a higher high above that level or a longer-term pullback maybe around that 50-day moving average or even deeper as I mentioned, down around 195.00.
I think Gold ( NYSEARCA: GLD ) is definitely worth watching. But unless something fundamental happens like Money Printer Go Brrr or more geopolitical swinging between countries around the world, I think Gold ( NYSEARCA: GLD ) is probably going to consolidate here for a while. If you are an active trader you might want to be a little more tactical in your entry. So definitely something to look at every day but that doesn’t mean you have to buy it right here right now.
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