Gold's Breakout: $GLD, $GDX, $GDXJ

Yesterday, I discussed gold's (GLD ETF) breaking out of a 7-year Complex Head & Shoulders Bottom in June 2019.

The following is the weekly chart of GLD that shows the breakout from this massive pattern:

Chart from: freestockcharts.com


The next chart is GLD's daily chart. Since the June 2019 breakout from a 7-year bottom, GLD has arguably been forming a 4-month bullish flag that may start the next leg up:

Chart from: freestockcharts.com


The bullish flag interpretation is just that: one possibility among many. I will be looking to add to my GLD, GDX, and GDXJ holdings with a strong breakout from this possible continuation flag pattern.

Stay patient and manage risk by trading money that you can afford to lose. Remember, trading stocks is speculating, and speculating means the high risk of losing money. You can manage (but never eliminate) this risk by using classical charting principles, but all the rules won't save you if you are impatient or if you fail to cut your losses pretty quickly if the price action goes against you.

Disclosure: I own shares in GLD, GDX, GDXJ, and individual mining companies.

Gold ($GLD) Breakout

In a previous post, I discussed how gold (I will use the GLD ETF to discuss gold) had to overcome triple resistance to complete and break out from a nearly 7-year Complex Head & Shoulders Bottom.

On June 20 of this year (2019), gold completed that 7-year H&S bottom with a decisive breakout:

 
 
Chart from: freestockcharts.com


This breakout and pattern completion contain vital lessons.

First, you have to be patient.

Second, you have to be patient.

GLD took 7 years to form its complex H&S bottom. Also, when gold looked like it was about to break out in early 2018, the triple resistance mentioned above decisively rejected the attempted breakout.

In fact, the rejection was so strong that by October 2018, GLD declined 15% from its early 2018 high. And from here you had to wait nearly a year to see GLD gap up in June 2019 and complete the 7-year H&S bottom.

Now let's see what GLD has been doing since its June 2019 breakout. After surging about 14% from its June 2019 breakout, GLD has been trading downward and sideways. My personal interpretation (just my interpretation) is that it is forming of a bullish flag that may start the next leg up.

Bullish flags tend to slope downwards (but not always: it can slope horizontally or even upwards) as GLD is currently doing as shown in the above chart. I will be watching to see if GLD breaks out (or not) from this 4-month flag.

Stay patient. If you "miss" this breakout or others, there will always, always be other chart patterns setting up.

As you wait, live a full life outside of the markets. You might even check out my book. I know how that sounds, but I really believe in the message and perspective of my book.
 
Disclosure: I'm long (own shares) in various gold mining companies. I also own shares of GDX, GDXJ, and GLD.