The next sell signal on GLD (gold ETF or /GC, /MGC gold futures) has been triggered on the breakdown below the uptrend line/bearish rising wedge pattern, although /GC (gold futures) is still within close proximity to its comparable trendline. As such, one might opt to only add another fractional lot here while waiting for a solid break below Wednesday’s low of around 4277 in /GC to be taken out. Daily chart below.
GLD daily Jan 2nd
Although still in close proximity with the recent year-end whipsaw/volatility, /GC is currently trading below the uptrend line with a solid drop below the 4277ish recent low likely to solidify the sell signal/breakdown. 120-minute chart below.
GC 120m Jan 2nd
The SLV (silver ETF or /SI, /QI silver futures) swing trade that was also entered with a starter short position last week offers an objective add-on following Friday’s breakdown below the uptrend line as well as the uptrend line on GLD, with a full position if/when /GC takes out Wed’s low of ~4277. Daily chart below.
SLV daily Jan 2nd
/SI (silver futures) 120-minute chart below showing the recent breakdown & backtest of the upper-most trendline.
SI 120m Jan 2nd
As stated last week, I will be leaving town today to visit family on the other coast, returning over the weekend with trade ideas & market analysis to resume as normal next week. As of now, nothing has changed on my outlook for the major stock indices with QQQ still an active short trade as both a typical swing trade (daily chart with one of the two price targets already hit & the recent year-end rally the typical reaction off that initial tag of T1) as well as a longer-term swing/trend trade based off the week charts.
While gold & silver are most certainly counter-trend trades, I feel that silver & GDX currently offer one of the best R/R‘s (risk-to-reward ratios) based on the potential for high double-digit gains with relatively small losses from the initial short entries last week. (Silver & GDX are likely to fall much more than gold if & when the next correction or top comes).
Finally, I’d like to wish everyone a very happy, healthy, & prosperous New Year!
-Randy Phinney