Looking for a store of value? Check out Gold vs. Bitcoin. (January 16, 2018)
GLD GXBT GLD NUGT
I want to talk about a little dislocation, so to speak. We are looking at Gold ( GLD ). Gold ( GLD ) has kind of been on a tear here. From this last low it is up 8.5 percent, which is a lot for Gold ( GLD ). If we look at this on the weekly chart you can see it is okay. But then you look back and see where this thing has been; this used to be a great deal. It is starting to set up to be that way again. I tweeted a while ago that both Gold ( GLD ) and Bitcoin are seen as stores of value, just by different people of course. Typically the Gold ( GLD ) bugs aren’t going to be the ‘Bit’ bugs.
They are kind of trading in a correlated way. Here is what I mean: Gold ( GLD ) bottomed right here around December 16th. If you look at Bitcoin ( INDEXCBOE: GXBT ) (this is just the trade price for Bitcoin ( INDEXCBOE: GXBT )), you will see that it topped at 12.18. These things really do trade in sync, just in the opposite direction. No, I am not talking about a pairs trade. What I am talking about is, if you can understand this relationship then you are going to be able to make some good money. So if you see the little bug on CNBC about the Bitcoin ( INDEXCBOE: GXBT ) bubble and this and that and the other thing check out Gold ( GLD ) and see what it is doing.
On the other hand, if Bitcoin ( INDEXCBOE: GXBT ) is rallying then don’t be so eager to get long Gold ( GLD ) because they just don’t really trade in sync they trade opposite. If we look at the NUGT ( NYSEARCA: NUGT ), this is the triple ETF, this could be a trade that really works tomorrow. Again, it is triple your fun here, I wouldn’t really call it a flag per se but it is the same dynamic. A big move up, a pullback on fairly light volume and then a breakout to a new high today.
Be careful here, I think you can go long this vehicle. I would keep a stop below 35.00 because on these triple ETFs you can’t give them a lot of room because they can move pretty fast. This is a little bit volatile, I would give it just a little bit of room down to the high 34.00s. And then if this does start trading up look for $2.00 or $3.00 in it and then get out of here. That is how I would trade this; but just keep in mind this relationship between Bitcoin ( INDEXCBOE: GXBT ) and Gold ( GLD ). I don’t really see anybody talking about it but that doesn’t mean that they aren’t; it just means I probably don’t watch as much financial TV as I need to, but I do watch as much as I want to.
Free Chart