A Look Inside The Trend Day In Gold ETF, GLD

While the Stock Market gave us a Trend Day Down, Gold gave us a powerful trend day up.  I thought it would be more appealing to look at an upward-sloping trend day than a down one, plus it shows that the “ideal” intraday concepts I frequently discuss using the DIA (DIA), actually work for all markets and stocks.

GLD (GLD) (Gold ETF) 5-min chart:

The day began with an upside gap of just under $1.00 (the larger the gap, the lower the odds of it filling intraday) and we had a push back to the downside that found support at the “Cradle” or confluence crossing of the 20 and 50 EMAs (that’s my favorite zone, by the way).

Price formed a doji at 10:00 and began rallying back upwards off an “Impulse Buy” trade set-up into new highs.  Volume rushed in around 11:30 as price surged to new intraday highs, confirming the odds were quite high for a Trend Day to develop.  Price formed a New Momentum High and you should have been looking to buy the pullback to the 20 EMA which occurred just before 1:00 as price formed a picture-perfect doji at support.

Price then formed a tight band or rising rectangle, hugging the 20 EMA as support the whole way.  Toward the end of the day, the buyers swooped in to drive prices even higher into the close, completing a picture-perfect Trend Day Example.

Notice the powerful volume surges, most all of which occurred on “up” bars which - to an extent - is quite bullish.

Where does that leave us on the Daily Chart?

I chose specifically to do a post on gold last night, entitled “A Mid-week Look at Gold” because I felt odds were quite high we’d at least get a reaction bounce off the rising 50 day EMA which is exactly what happened.

Volume is dis-confirming the recent down-swing, which indicates sellers are less-aggressive to sell.  A downside volume non-confirmation hints at underlying bullishness (meaning, sellers are backing-off).

That could change if price finds resistance at the 20 day EMA, but for now, odds seem to favor at least some sort of upward rally/retracement, particularly given today’s powerful action on such a weak day in the stock market.

Keep watching gold and the interplay with the Stock Market for additional clues and possible opportunities.

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