GLD Talk

Here is a daily Bollinger Band/Money Flow Index chart for GLD, the etf that tracks gold the metal (as opposed to gold company shares). I'm interested in this as a trade using the bb/mfi method. By my rules, it shows a bb bear signal, confirmed by the mfi.

In favor of the trade:

It's a clear signal and confirmation, and the price really hasn't made a move yet. GLD has been trading sideways the past four days.

Also, the downside potential is large, using Bollinger Band rules. The shares are trading at about 112, giving us 5.7% downside before the simple moving average support level. And thelower band is at about 99, giving us a stunning 13.1% potential.

Against the trade:

The mfi confirmation has not yet moved out of overbought territory, which weakens my confidence in it.

There are price support levels at 110 and 108, which could make the greater potentials shown by the bands to be wishful thinking.

The bands are widening. By bb rules, it's the narrowing of the bands that indicates a change in direction.

So, a decision to make in the last half-hour of trading.

The pps/mfi combo isn't showing a signal, so no help there.