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GLD Golden Cross

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GLD may be about to do something it hasn’t done for years.

It’s 50 week moving average may be set to cross over its 200 week moving average.

This would leave a so-called bullish Golden Cross on the weeklies.

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Notably, GLD left a weekly Bear Cross in the fall of 2013 when the 50 week crossed below the 200 week.

While that didn’t decline the top of course, it did warn players of another two years of downside dead money in the metals.

If the advance from 1999 to 2011 was a wave 1 followed by a correction into 2016 (roughly half the duration of the preceding advance) then the strong rally from January 2016 may have been the beginning of a powerful bull market.

The implication is that the recent correction pulling back to the 50 week line into our early October cycle lows set the stage for a strong rally phase.

The point of recognition will be GLD offsetting the large down bar from three weeks ago.

This ties roughly to gold itself recapturing 1308, a prior swing high. The market has a memory. Reclaiming 1300-1308 should see a strong impulse higher which should take gold to 1450 to 1500.

Interestingly, this ties to roughly a 50% retrace of the prior bear market from 1921 to 1045.

My thinking is that even if gold is in a bigger picture bear market it should trace out a Measured Move or A B C advance to 1450ish.

IF the parabolic leg up into the September 2011 high was a 3rd wave, with the ensuing decline into early 2016 a 4th wave decline,  then it is worth considering that 5th waves in commodities can extend and are often more powerful than 3rd waves.

Monday’s report will show the remarkable vibrations between gold and the SPX as seen through the lens of the Square of 9.