If we look closely at the enclosed patterns, we can make the case that since Aug 8 & 9, spot gold is looking a bit toppy, while the emini S&P 500 and spot silver have a considerably more constructive look.

If we translate that into fundamental reason, perhaps scared money is beginning to flow out of gold and back into equities and industrial commodities in anticipation of improvement in the U.S. and global economies.

Certainly, we have no tangible reasons to think that the latter conditions are visible over the horizon, and even fewer reasons to think that the "fear trade" is dissipating.

Nonetheless, right at this moment, these comparison charts could be whispering to us that things definitely are not what they appear to be -- which ETF traders of the SPDR Gold Shares (GLD), iShares Silver Trust (SLV), and S&P 500 Depository Receipts (SPY) may want to heed.

By Mike Paulenoff

Mike Paulenoff is author of MPTrader.com (www.mptrader.com), a real-time diary of his technical analysis and trading alerts on ETFs covering metals, energy, equity indices, currencies, Treasuries, and specific industries and international regions.

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Comments

TBB
13 Aug 11, 16:42

Head and Shoulders top

Mike, great illustration of what looks like a head and shoulders top in gold on the hourly chart. Looks like $1650 is in the cards. Do you agree?

Thanks!

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