Gold follow up

Last week I noted on the blog that GLD might be putting one of the best weekly bars in quite some time. The weekly bar doesn't become official until close, because theoretically it could have jumped above a level and closed well under it keeping the downtrend intact. But that didn't happen, so let's check it out again.

If you are really interested in this idea, first I suggest checking out that prior post and check how $GLD looks in a strong uptrend like 2009-2011. It jumps above major pivots and or lifts from them as support, then runs. That isn't happening quite yet because it is still below the all important YP (orange crosses).

But it did clear the 1HP (orange dots) and that is potentially a big deal, because it has been below major pivots for so long. So what can happen from here? 

1. Most bullish, continue to rally or pause just slightly at the YP, then rally from there.
2. Some bullish, rally up to YP, drop but still hold the HP, then in more time clear the YP.
3. Sideways, stay congested between the two major pivots for a while
4. Some bearish, give up the gains and break under the 1HP again.
5. Most bearish, quickly return to status of below all pivots.

Now let's turn to the daily chart for more information with the medium term quarterly and monthly pivots turned on as well.

Ah ha! Now we see the current FebP at 105.78. This means 3 pivots are in the 105 area: 1HP 105.22, Q1P also 105.22 and the Feb P. Easy hold above that support cluster at 105. Next would be to watch reaction at resistance at the YP. People putting money in the market might also want to check the futures, both GC1 continuous and current contracts, as occasionally the futures will often confirm or question a setup on the ETF GLD.

A long term investment strategy is to be partially long when an asset is above one of two long term pivots, fully long or leveraged when above both, and out, short or hedged when below both pivots measured from weekly close. On this basis, $GLD put in a partial buy as of 1/29 close. While a fund could do their transactions right there, an individual wanting to check charts once weekly on the weekend would likely be buying on the open today which due to the gap is higher than Friday. Still, the open at 107.54 is just a little over 2% above the 1HP which is not bad risk/reward for a long term position. If breaks on a weekly close then the position is closed. If it rallies above the YP with a look of support, then add.