If you had invested in gold at the beginning of this year and did not cash out at the end of January, that investment probably had not done very well for you. But, your luck in gold could be about to change.
In the past two months or so, GLD has been working hard to establish a base. On Friday, GLD made another nice jump and could induce a breakout!
GLD closed at $110.87 last week. A break above $112 could send it onto a run to test $118.
Interestingly, the dollar ETF, UUP, has been slipping. The weekly chart for UUP could be shaping into a fall:
We can see that UUP has been trading in a tight range. Last week's fall really pushed it to the edge of a cliff. Its weekly MAs are about to go into a new bearish formation. This chart looks very similar to the chart on the Dow that I showed in an article at the beginning of August, in which I correctly predicted a market pullback. (A hidden question from this is whether this chart is telling us something about the chances of the Fed raising rates this year.)
It is often true that gold is seen as a "safe haven" and it often trades opposite to how stocks move. But, last week, both gold and stocks went higher.
We traded GLD calls last week and made some nice profits. Let's see if GLD can break above $112 and make a breakout.
Good night and HappyTrading! ™