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Precious Metals Equity Index Form a Triple Top, What’s Next?

Chris Vermeulen
By Chris Vermeulen / September 8, 2010

GLD – Gold Bullion ETF

The chart of gold has identical patterns no matter if it’s this ETF or spot gold price. So this analysis goes for both ETF and gold bullion prices. Anyways, the past two times gold rallied for this length of time without any sizable pauses we saw the price of gold drop $70 per ounce, and $140 per ounce which is equivalent to $7-$10 drop on this GLD fund which is a decent size move.

The chart is screaming of a nasty correction to occur any day now. With gold testing the June highs I feel its only days away. What I am looking for is a pierce of the June high. That will suck in the rest of the bulls as they jump on the band, and cause all the shorts to cover their positions. This causes a pop, and once buying starts to dry up, the big money will start to sell down the price to trigger the stops and start a multi day waterfall sell off.

With the declining volume as the price grinds its way higher it tells me fewer individuals want to buy in at these high prices. Once the price starts to slide it will cause the stops to triggered. And because there have not been any substantial pullbacks along the way, there is a larger number of stops sitting in the market waiting to get hit.

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About the author

Chris Vermeulen

Chris Vermeulen is Founder of the popular trading site TheGoldAndOilGuy.com. There he shares his highly successful, low-risk trading method. Since 2001 Chris has been a leader in teaching others to skillfully trade in gold, oil, and silver in both bull and bear markets. Subscribers to his service depend on Chris' uniquely consistent investment opportunities that carry exceptionally low risk and high return.

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