The Golden Touch

Greek legend has it that King Midas obtained the ability to turn everything he touched into Gold after an act of kindness. The King was ecstatic as he turned everything in his Palace into Gold. But then as his food and drink turned to Gold before he could eat and drink them he cursed his power. I wonder if there is someone today that is in the ecstatic phase of this parable turning everything to Gold he touches?

The broad stock market sure looks like Gold. And in fact Gold itself looks to be having a great run higher in price. The chart above of the Gold ETF ($GLD) shows how Gold has run up since a low in early December. It is now breaking above the September 2017 high after setting that higher low in December. It also shows a bearish harmonic Shark pattern, highlighted by the two triangles. This pattern looks for a move to that 113% extension of the initial leg lower from ‘X’ to ‘A’ and then a reversal of 38.2% or 61.8% of the full pattern. These retracements come at about 125 and 122 in the ETF. The pattern does not trigger until a Terminal Price Bar prints, with price rising through the 113% level and closing below it.

These patterns are not a guarantee of a reversal. And in fact they fail quite often when they exist within a larger harmonic pattern. This is the case with Gold. The longer perspective weekly chart of the Gold ETF above shows the Shark embedded within a Deep Crab harmonic (orange) that is now triggering with a move over that September high. This gives a target to about 146 above. So the combination suggest a potential stall or short term pullback that then reverses and continues much higher.

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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.

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