LaDucTrading

Gold: The Signal and the Noise

Gold had it’s largest Quarterly gain in 30 years. Funny how it launched itself FROM Quarterly support…

I had no less than 10 price targets on $GLD from that ~$100 price level on Quarterly, 61.8 Fib Retracement and Channel Support! I thought it would slow at $116 but it sprang clear up to my top price target of $122+. Funny how technical analysis works sometimes, isn’t it?

GLD from 2-4

I follow chart patterns and price action above all else; indicators and sentiment last. Not the sentiment of gold bugs or Gold would never get “overbought”. I try to keep that in mind as I separate out the Signals from the Noise. It’s hard enough to interpret what the Signals are telling me let alone the “Crowd”!

In this case, Commercial Traders, who can control more than 50% of open interest, are bearish. This crowd matters. In fact, Commitment of Trader’s Report shows they are most bearish since January 2015.

GOLD COT

And look what happened last January 2015: Gold lost 20%.

GLD W Sto-20%

Although I prefer to short spikes in Gold and buy rounded bottoms, this rounded top (near Head & Shoulder) on the Daily is setting up to be short for me. I also like how the cyclical nature of indicator Coppock Curve supports this thesis. One more thrust higher for that right shoulder and I expect a nice pullback to $112 gap-fill at least.

GLD D Coppock

Another ‘indicator’ I like is the Net Commercial Trader Position break of long-term support (green line in bottom panel). Gold futures may launch from here, with velocity, to the downside.

 

GOLD COT L-T

With that, I’m looking for the turn, down, in gold where I expect a revisit of $112 in $GLD. I will then look for the Bull and Bear signals, but first we need to get there despite or in spite of the noise.

 

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