Gold Gearing to Breakout
- Posted by Greg Harmon
- on July 25th, 2012
Gold is gearing to break out, against the Euro anyway. After nearly a year running in a tightening symmetrical triangle, the ratio of the SPDR Gold Trust Shares, $GLD, to the Currency Shares Euro Trust, $FXE, is moving back toward the top of the triangle. It is about 55% of the way through the triangle, nearing the peak action zone around 65% (around the October timeframe). It also has an interesting phenomenon occurring with the Simple Moving Averages (SMA). The 50, 100 and 200 day SMA’s are bunched and have been for a while. What to watch for is the 50 day SMA rising from the pack. This occurred last in May 2011, a period followed by a rise in the ratio from 1.00 to 1.32 over 4 months. This is not a prediction for a move of this magnitude again. But with the 50 day SMA rising from the pack as the ratio approaches the top of the triangle, during a time when the macro economic environment is ripe for a Euro collapse and a large flight to Gold, it is worth watching. A break of the pattern higher will have technical analysts looking for a move to 1.50 or higher in the ratio.
If you like what you see above sign up for deeper analysis and trading strategy by using the Get Premium button above. As always you can see details of individual charts and more on my StockTwits page.
The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.blog comments powered by Disqus
Gregory W. Harmon CMT, CFA, has traded in the Securities markets since 1986. He has held senior positions including Head of Global Trading, Head of Product Development, Head of Strategy and Director of Equity. (More)
Dragonfly Capital Updates
- Macro Week in Review/Preview May 17, 2013
- Dragonfly Capital Views Performance Through May 2013 Expiry
- Premium Earnings 5-17-13
- Which Way is Up?
- Cicso Kid Was a Friend of Mine
- Premium Earnings 5-16-13
- Lights Out for the Shiny Metal
- It’s Official – I Am Now An Expert and Bill Gross is Not!
- Revisiting the Grandpa Portfolio
- Premium Earning 5-15-13