Wash, Rinse, Repeat: Long GLD (gold) on this latest divergent low (aggressive) with an alternative entry or add-on to come on a solid recovery back above the 176ish support that was taken out today (i.e.- potential whipsaw). Daily chart below.
GLD daily Sept 27th
My preference is to start scaling in to what could prove to be a longer-term swing or trend trade with the potential for additional price targets to be added, depending on how the charts develop going forward (i.e.- not a fully position at this time). This meshes with the analysis of EUR/USD I covered in today’s previous video in which EUR/USD had fallen to the top of a key long-term support zone with the potential to either reverse here or continue a bit lower to the bottom of the zone before a meaningful reversal & rally.
As such, an aggressive starter position here (aggressive because this is a counter-trend trade with zero buy signals on gold, in fact, GLD just broke below support today), adding to the position either down to the bottom of the support zone on EUR/USD and/or on a solid recovery back above the 176ish level as that would make today’s breakdown a potential whipsaw/bear trap.
As usual, one could opt to go long silver (SLV) and/or the miners (GDX, SIL, etc.) in lieu of gold although there is a decent chance we could see one of those rare instances where gold outperforms the miners on a relative basis (mainly, falls less than GDX) should the stock market & leading tech stocks smash through the current support levels followed by a very impulsive leg down. While normally the miners move up & down along with gold only in larger percentage terms, in the case of a hard sell off in the stock market, the miners (as equities or stocks, NOT the potential flight-to-safety hard asset that gold is) tend to get sold down with the rest of the stock market. Rising crude oil (fuel/energy) prices also put pressure on the miners as that is one of their largest expenses.