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Bulkowski’s Blog Archive: GLD

Blog Posting: March 18, 2008, GLD Rush at End (GLD)?

The chart shows GLD, the exchange traded fund based on the price of gold. Two symmetrical triangles appear on the chart and both act as continuation patterns. Nothing exciting there, really, and I have reported on those patterns before in GLD.

However, the nightly news this evening had a report that said for weeks now, people have been having parties where you bring your gold jewelry, someone weights it, examines it, and they buy it from you right on the spot. They send it to someone that melts it down into bars. This suggests we must be near a top. Why? Because it made the national news and because people are actually doing this. They are flooding the market with gold.

How high can gold go if the supply of this non-perishable item goes unchecked? Think about it. I am not saying price will reverse tomorrow, but we must be getting close to the top. Trade accordingly.

Aftermath

As the adjacent updated chart shows, the very next day price started dropping. Perfect timing with a huge dose of luck enabled this bearish prediction to come true. Some may argue that if a number of these predictions come true, the luck has little to do with it. I will leave you with that thought.