Monday, October 17, 2011

GLD and SPY - Further Pullback I Think

Click on Chart to Enlarge

This is a 4 hour chart of GLD, the gold ETF. It is showing a nice bearish divergence suggestive that we may a pullback continuing tomorrow and beyond. My suggestion has been and still is that this is likely to exceed the Sept low at least briefly before a probably reaction rally to a lower high than the all time high.

Silver is positioned similarly on the hourly chart. I expect new lows for the correction.

Click on Chart to Enlarge

This is an hourly chart of SPY. Again there is a nice bearish divergence on the MACD here which suggests a continuing pullback ahead. The blue arrow is the level of the unfilled gap down that may attract price on this decline. Also the daily slow stochastics is overbought and made a bearish cross today. To confirm this as a sell signal I like to see the low of the day be broken in the action that follows. So if we make a lower low tomorrow (below today's low) then that will be better confirmation of a high, and I will post a stop on the trade as well.

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