Gold is Not in a Downtrend

• Posted by Greg Harmon
• on October 25th, 2012

Two people will invariably describe the same picture two different ways. three people three ways. Ten people ten ways. It all depends upon your perspective. This rationale applies to using technical analysis to describe the price action in a chart as well. When I look at the chart of Spot Gold ($GC_F, $GLD) below I see a an 18 month consolidation after a more than 10 year uptrend. I

Gold, Weekly

am sure you would be tired and need a rest after 10 years of running higher too. There is plenty of room back to 1550 before this turns to a bearish bias. But with a different perspective, in this case a shorter daily timeframe, it is clearly in a downtrend. The chart below shows a near perfect Tweezers Top October 5th and a march lower since. From this shorter perspective it seems that

Gold, Daily

the confluence of the Simple Moving Averages near 1660 is the next target and then the center of the previous consolidation near 1600 if it fails at 1700. But remember from the weekly view above, that is still $50 above where it would turn bearish. It all depends where you stand. So step back occasionally and gain another perspective.

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Dragonfly Capital Views Performance Through October 2012 Expiry

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