GLD Watch

The exchange-traded fund that tracks gold, GLD, has moved into bull phase on the parabolic sar, confirmed by Person's Proprietary Signal and a rising macd and stochastic.

	trend	adx	psar	pps	macd	macd trend	sto	sto trend
GLD $113.48

The average directional index for GLD is a low 17, which disallows it as a trade by my rules. I trade with the trend, and GLD, it can be said, has been going nowhere for some months.

It is, however, an important indicator, and so worth a write-up.

You are here:

• Reversal
• $119.54, +5.3%
• $116.88, +3%
• $114.13, +0.6%
• Now $113.48
• Reversal
• $110.76, -2.4%
• $107.87, -4.9%

Couple of things to note here.

A push past $114.13 pushes GLD past near-term resistance levels. The next reversal levels up, $116.88 and $119.54, were set in November and December 2009, respectively, when GLD was pushing toward a peak.

There's as much downside slide potential as their is upside, in terms of reversal levels.

So, all in all, not very attractive as directional play in my book. It's too prone to whipsaws (low adx reading) and has an equal ratio of risk to reward based on support and resistance levels.

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Options as a Strategic Investment

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This signal will be followed in the daily Watchlist, which is posted beginning around 2:45 p.m. Eastern. Look for it at www.timbovee.com.

Abbreviations:
psar - Parabolic Stop and Reverse
adx - Average Directional Index
pps - Person's Proprietary Signal
ma20 - 20-day moving average
macd - Moving Average Convergence-Divergence
mfi - Money Flow Index
sto - Fast Stochastic

About the glance: The colors indicate the state of each signal.

• trend: Determined by the 5-day moving average, green for up, red for down, yellow for sideways
• adx: orange for above 30-up, blue for 20-down, purple for in the middle. Red is most prone to whipsaws
• psar, pps, macd: green for bull mode, red for bear
• sto: green for overbought, red for oversold, yellow for the neutral zone.

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