GLD psar bear signal

Gold (GLD) is showing a psar bear signal this morning after gapping down this morning, opening 0.7% below Monday's close. since then it has traded narrowly and stands about 25 cents above the open.

Since its recent peak of $119.54 on Dec. 8, 2009, GLD has executed a low, a lower high, a lower low and a second lower high before beginning its recent slide on Jan. 11.


The difference between the first and second lower high is miniscule, a mere 1%. So the broad movement can be seen as much as a sideways trend as a directional one.

The pps flashed a bear singal on Monday. The macd is in bull territory but declining twoard the zero dline.

You are here:

• Resistance
• $119.54, +9.3%
• $116.88, +6.8%
• $113.59, +3.8%
• $112.18, +3.1%
• $110.39, +0.9%
• $109.60, +0.2%
• Now $109.40
• Support
• $106.60, -2.6%
• $105.27, -3.8%
• $102.28, -6.5%

It's a pretty congested neighborhood, one prone to sudden acceleration and braking, fender-benders and whiplash. Also, the downside risk (distance from support) is notably greater than the upside reward, look at the closest support and resistance.

---

The New Market Wizards: Conversations with America's Top Traders

---

I wouldn't play it directionally, if I were opening a position on GLD. I wuold look at an iron condor, say $112 to $108 for the max profit range. That's a 42 cent credit for a March iron condor meeting those specifications, and a 67 cent credit for an April expiry.

Last time GLD showed a psar bear signal, it declined 7.1%.

Abbreviations:
pps - Person's Proprietary Signal
ma20 - 20-day moving average
macd - Moving Average Convergence-Divergence
mfi - Money Flow Index
sto - Fast Stochastic