Wednesday, January 5, 2011

Is the gold volume pattern telling us something?

A short post on the volume pattern in GLD during the last three odd months. Despite an intraday break of MA(50), GLD once again managed to close above the level. Thus, August is still the last time when we saw a close below MA(50) on GLD. But is the volume pattern trying to tell us something?
As can be seen in the chart above, of the top 15 volume days since October, 12 have been down days. Despite this very bearish volume pattern, gold has still performed rather well. The question is, for how long will gold be able to shrug off this bearish volume pattern? Be very careful while taking new long positions in gold and gold miners here and keep close stops.

Take care and good luck!

No comments: