Gold Breaks Down (GLD)

Model Notes: The gold model is short and the gold market broke down, with the GLD closing near the previous exit TSP. So the yellow metal model is in good shape. Bonds (the featured October market) proved to have a more challenging time. The TLO didn’t drop after the late-Sept sell and the only other action was a late-Oct buy that was not terrible (TSP was on a down day for the entry and the final trading day was positive) but not profitable on the outset. I will do a post-mortem shortly. I plan to do more model work in this area and have scheduled a rematch for March.

Featured market rotation: Bonds for October (waving goodbye)  VIX for November (looking for a starting signal now). Brazilian real for December. S&P for January. Gold is currently non-rotational.

Model Portfolio Signals: (Gold) Short= 10/20 (TSP=111.73), (Bonds/TLO) Buy =10/27 (TSP= 71.68)

Note: TSP is calculated by using the closing price of the trading day after the signal day.

Nonlinear Trading Themes:

  • CTM151030gGold: The yellow metal broke below the 111 (GLD basis) support level. Next stop 107? The model gold portfolio is still short.
  • CTM151030bBonds (Oct. Featured Market): We are waving good-bye to this area. I had hoped for more signal activity. I plan to visit this area (with model enhancements) in rematch for March.
  • CTM151030vVIX (Nov. Featured Market): I spent almost two weeks at the end of October to get an initial entry signal but no luck. VIX starts November flat. On the plus side, the implication is that stocks will continue to rise.

Note: Technical analysis comments are based on interpretations of non-linear trading models, combined with chart price action.

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GH Garrett – Veteran Market Watcher for  © 2015, “Nonlinear signals that matter in gold trading.”