GLD (gold ETF) will be added as an Active Long Swing Trade as well as a Long-term Trade Idea here around the 114.89 level.
GLD daily Oct 11th
The price targets are T1 at 117.21, T2 at 119.78 & T3 at 123.50, with the potential for additional price targets, depending on how the charts develop going forward. The maximum suggested stop (of targeting T2 and/or T3) is a daily close below 111.90. The suggested beta-adjusted position size is 1.2.
GC 60-min Oct 11th
One of the primary reasons for the long entry today is the fact that /GC (gold futures) have made a fairly impulsive breakout above downtrend line as well as the key 1213 resistance level on the 60-minute time frame. I have also highlighted some recent bullish developments that I had been looking for in the EUR/USD currency pair, with those developments as well as an update on gold & GDX covered in this video published earlier today.
Another consideration for a long in gold is my focus on tactical asset allocation as we head into what I expect to be a volatile 4th quarter in the stock market as gold has traditionally been considered a safe haven asset during times of market volatility.
While the success or failure of the already active GDX & PPLT long trades and this long on GLD are closely tied together (and as such, the very tight correlation should be factored in when determining one’s position size & total exposure to the precious metals & miners), one final factor in adding gold as an official trade is the fact that while GDX will usually outperform gold both to the upside during bull trends & to the downside durning bear trends, as equities (companies with expenses, employees, profits & losses, etc.) I have seen periods where gold rallies & the gold mining stocks lag behind or even move lower due to blanket selling in the stock market.