Wednesday, September 2, 2009

Gold (GLD) Breaking Out of a Narrow Triangle on Charts, Silver (SLV) Continues Strong

Gold breaking out is either the reflation trade version 48.148 OR "uh oh something bad is coming down the pike" trade ... gold has been in a big descending triangle getting narrower and narrower; when those break out in either direction it is generally a big move.

May - June 2009: $900 - $1000
July: $910 - $960
Aug: $930 - $970

Based on today alone, the direction appears to be up ... +2.1% thus far in the yellow metal BUT to be sure we want to see it get north of $970. Volume on the gold ETF (GLD) today is massive - well over 20M shares when almost all of August has been under 10M. Silver (SLV) continues its strength that we highlighted yesterday, up another 2.6%+.

One reader highlighted gold last week - I forgot who but kudos to the early call. Now we have to figure out what the message of the market is with these 2 metals aka what are HAL9000's algorithm's signaling to its microchips.

EDIT 3:10 PM: Gold Miners ETF (GDX) exploding - up 7% on nearly 3x normal volume. (hat tip reader on that one too) HAL is on the move.

p.s. anyone know what is going on with natural gas ? the ETF is down 8%?? UNG!

Long Powershares DB Gold Double Long in fund; no personal position

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