The optimist in me believes the SPDR Gold Shares (GLD) is in a bull flag on the daily chart. Beginning with the strong advance on Dec. 4, gold endured four sessions of sideways consolidation, all without meaningfully losing the support of its five-day and eight-day exponential moving averages (EMAs). As far as Friday's session is concerned, the session's bearish gap was closed within 20-minutes, and once again price closed above our shortest timeframe moving averages.
We all know how horrid gold has traded over the past year, but as long as price is holding above the five-day and eight-day EMA, I believe buyers have a chance. For the time being, I'd be using $102.60-$102.40 to measure my risk.
Several readers have emailed asking whether I was looking to get long (again) the JPMorgan Alerian MLP ETN (AMJ) now that it's trading back near last week's swing lows. You'll recall the logic behind the original trade was based on the Relative Strength Index (RSI) triggering a massively oversold reading. The RSI is currently printing near 30, which is long way from the 16-18 readings we were staring at last week.
With the AMJ closing beneath its five-day and eight-day EMAs, I expect to be on the sidelines until I get another RSI-related set-up, or price is back above its shortest timeframe moving averages. Remember, the overall trend on AMJ is still bearish on virtually every timeframe imaginable.
Any trading or volume profile related questions can be posted in the comments section below, emailed to me at firstname.lastname@example.org or posted to my twitter feed @ByrneRWS.