GLD – Reading The Daily Chart…

Firstly, as an update to Monday’s issue, the NAAIM Exposure Index number of 49.76 was released yesterday.

As for today, there isn’t much out there that we like ahead of today’s option expiry. Of any sector though, gold (GLD) looks to be the most intersting. Please observe the chart below.

Here is how we are reading GLD.  After reaching a new high in early September, GLD returned to its six month trading range. It tried once again to leave the range, but failed and left a lower-high (LH) in its wake.

For the past fifteen trading days, GLD has put in a double bottom (red circles), but has only flagged slightly higher creating the next LH. This latest LH inside of the range is a signal of weakness.

We have an alert set for a breakdown from the bear flag where we will look to initiate a short position for a return by GLD back to the bottom of the range.

Gold trading lower may in fact mean higher prices for equities, but this is just how we see this particular chart. We will have to see if that is in fact how things work out.

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