The chart above shows exactly why the next few days could prove crucial to the intermediate-term picture. Bottom line, if GLD breaks beneath the previous lows that I’ve labeled #1 and #2, it will create a bearish impulse leg sufficiently robust to put pressure on bullion for yet more weeks to come, if not longer. Moreover, it would take a trampoline rebound to above 63 to negate the bearish implications of such a break. We’ll have a clue as to what’s coming by observing this morning what happens at 60.77, a hidden-pivot support. That was the target we were using yesterday to bottom-fish, but GLD only got down as low as 60.83. If the pivot gives way today, though, we should infer that the more significant breach of lows 1 & 2 is coming.

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-- Posted Tuesday, 29 August 2006 | Digg This Article