2 Levels to Watch for GLD
GLD is the 2nd-highest capitalized ETF around, only behind SPY. It’s nearly triple the capitalization of QQQ, just to give you some perspective. And with such a fixation on the economy (both domestic & global), it’s no shock that the sometimes safe haven of gold has been in the limelight.
Some suggest GLD has topped, and in the near term, they have technical reasons which back that up (lower highs). But a closer look at the chart reveals a pair of important levels to keep on watch, so that’s what’s covered in this video.
(Direct video link is here for those interested in sharing).
Be sure to view in HD (720P) and full-screen mode for best quality in the video.
Trade Like a Bandit!
Jeff White
Producer of The Bandit Broadcast
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Jpyskaty | Dec 13, 2011 | Reply
Hi Jeff,
Good video. It is so easy to focus on the short term and have a negative outlook rather than putting things in perspective.
Two factors that have pushed gold down are 1) the dollar looking good in comparison to the Euro, and 2) that gold has done so well.
The last one seems backward, but makes sense in the world of paper profits. Many funds own gold at much lower costs than it is currently even with the pullback. They have other equities that they own at much higher costs, so it is gold that they have been selling for liquidity since they book a profit not a loss. (It must be painful knowing it is going to head back up, but it is their only way to put positive dollars on the books and open new positions.)
I think gold is a great investment, though I go with SGOL even though the buy/sell spread is a killer. That is because it is my insurance, and I trust Swiss gold to be more likely to actually have the inventory stated. American banks have lost confidence and trust for good reason.
The argument for Swiss gold is given support by the recent MF Global fraud. Very knowledgeable people like Fleckenstein lost funds in MF Global because accounts that were being used for personal trading were swept into the fraud.
They thought they were safe because they just had money and the futures they had bought using MF Global as a broker, not any specialized MF Global funds. Instead since fraud occurred, there was no insurance or safety for any account. FDIC and other insurance no longer applied.
The current market sure has me stumped. Thought I had found an angle by swing trading very small companies, but even these are now slammed by the violent back and forth gapping of the market. Looks like I will go back to my Stock Bandit University course and review buying pullbacks since breakouts have only been heart “breakers” with no follow through.
Best regards,
John
Anonymous | Dec 13, 2011 | Reply
Hey John!
Always good to hear from you, thanks for your comments here. You know me…I do my best to shun the ‘reasons’ behind the moves and just stick with the charts, so that’s how I call them!
I commend you for returning to TheStockBandit University courses, they’re intended to be a resource for you like that so that you don’t just learn the first time through, but rather that you are able to ingrain the right habits and the knowledge sticks. Keep that up.
Have a great afternoon!