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GLD, GDX & UUP Updates

So far, GDX (Gold Miners etf) found support at the S1 level (18.80) previously highlighted on both the 15 & 60 minute charts and has moved higher since. A slight modification has been made to the lower trendline on the symmetrical triangle pattern on this updated 60-minute GDX chart in order to adjust for the recent price action. Although a lot of focus has been on the very near-term direction of GDX recently via the 15-minute charts, the intermediate to longer-term outlook for GDX could hinge on the direction in which prices breakout from this symmetrical triangle pattern.

GDX 60 minute April 10th

GDX 60 minute April 10th

 

Regarding the $USD (US Dollar), the bullish fake-out (false upside breakout) scenario could still be in play should UUP reverse here around this horizontal resistance level (26.20ish level). It is worth noting that gold & the mining stocks are mounting a decent rally today despite a continued rise in the dollar. Typically, when these disconnects between the usual inverse correlation between gold/GDX and the $USD occur, a reversion to the mean often follows. In other words, although today's rally in gold & gold stocks could just be a one-day aberration, should this disconnect continue, one or the other is likely to play a quick game of catch-up (i.e.- either the $USD corrects or GLD/GDX moves lower).

UUP 60 minute April 10th

UUP 60 minute April 10th

 

My near-term read on the dollar is still not very clear and although I remain bullish and long gold stocks, price action in the miners is likely to continue to be choppy until a clear resolution of the symmetrical triangle pattern. I remain cautiously bullish both gold & the precious metal mining sector at this time and favor an upside resolution of the GDX 60-minute triangle pattern. Of course, that opinion & my position is subject to change as the charts do.

As I often state, where gold prices go, the miners will ultimately follow. Despite one's near-term outlook (bullish or bearish) for gold, the fact that GLD is clearly in a short to intermediate-term uptrend is indisputable. An uptrend is simply defined as prices making a series of higher highs and higher lows, which has been the case in GLD since the mid-March lows. Only a break below this reaction low around the 113.44 area would do some technical damage to the current uptrend.

GLD 60 minute April 10th

GLD 60 minute April 10th

Apr 10, 2015 12:25pm|Categories: Forex (Currencies), Gold & Commodities|Tags: , , , , , |Comments Off on GLD, GDX & UUP Updates