Since a lot of you gold bugs are a bit panicked by the selloff in Gold today, I thought I would share my GLD chart with you for a little reassurance. The chart was created using our SmartLevels Support and Resistance. See the chart below.
As you can see on my daily bar chart, the Gold market came right up to our SmartLevel at 1738.50 (173.85 in the GLD ETF). We could have easily predicted and traded that bounce.
However, as a long term holder of Gold, I would not be concerned about protecting my position until the Gold market got below 1541.60 (154.16 in the GLD ETF). Not only would it have to get below that level but I would want to see a retracement that held below that level as well. At that point, I would probably use an options collar to protect my position.
While that long down bar looks ominous, I wouldn’t panic yet. The chances that the Keystone Kops at the Fed can smoothly pull our currency out of the crapper still seems awfully remote.
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