Gold (GLD) Taking a Beating After Breaking Macro Support

Gold (NYSE:GLD) is getting absolutely taken to the woodshed this morning, down more than 4% after breaking macro support. Silver (NYSE:SLV) is down even bigger, so far more than 5% lower. While the magnitude of today’s sell-off is taking some people by surprise, there were clues that GLD was weakening and levels to exit the trade if you were long or potentially enter short of that is part of your arsenal.

This morning as we came in and GLD looked set for a sharply lower open, I sent out a note to my list and posted a chart on Stocktwits outlining the scenario in GLD. Over the last few months, there have ostensibly been many reasons for the precious metal to rally off macro support, but the demand simply hasn’t been there.


(click to enlarge)


(click to enlarge)

Here is what I wrote this morning:

A close here or lower than that $135-$140 happens a lot sooner than anyone would have thought

Lots of people have been scratching their heads about the action in Gold (GLD).

Some thought it would go up based on currency wars.

Some thought it would go up based on events in Europe and Cyprus.

Some thought it would go up based on the potential events in North Korea.

Some thought it would go up since our printing presses are working here and we could have inflation down the road.

When something doesn’t act well when it’s “supposed to,” that means it could probably go lower. Back in March, GLD broke below its symmetrical triangle around $161. That was an area to make adjustments.

Today if you are a “macro participant” in GLD, you need to watch $148-149.50 a close below this area opens the door for a move down to the $135-140 area.

Now, with today’s waterfall down in GLD, it looks like that $135-140 area could be hit sooner rather than later. You could have some Gold funds start to come under intense pressure with today’s sharp sell-off, which could cause even more panic selling.

Disclosure: No position in GLD

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About Scott Redler 367 Articles

Scott Redler is the Chief Strategic Officer of T3 Live. He develops all trading strategies for the service and acts as the face of T3 Live. Mr. Redler focuses on thorough preparation and discipline as a trader.

Mr. Redler has been trading equities for more than 10 years and has more recently received widespread recognition from the financial community for his insightful, pragmatic approach. He began his career as a broker and venture capitalist where he was able to facilitate relationships that led him into trading. Beginning his trading career at Broadway Trading in 1999, Mr. Redler moved on with Marc Sperling to Sperling Enterprises, LLC after establishing himself as one of the best young traders in the firm. As a manager at Sperling Enterprises, continued to trade actively while working closely with all traders in the firm to dramatically increase performance.

Mr. Redler has participated in more than 30 triathlons and one IronMan, exhibiting a work ethic that also defines his trading. His vast knowledge and meticulous attention to detail has led to regular appearances on CNBC, Fox Business, Bloomberg, and he is a regular contributor to Minyanville and Forbes’ Intelligent Investing blog. He has been quoted in the Wall Street Journal and Investor's Business Daily, among other publications.

Scott received a B.B.A. in Marketing/Finance from the State University of New York at Albany, graduating Magna Cum Laude from Albany's School of Business.

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