GLD is sporting a probable triangle formation which suggests that it may have one more decline before a more substantial bounce in this series of waves. It appears that the Head & Shoulders target may be the bottom of Intermediate Wave (3) of Primary Wave [2].

Depending on how fast Minor Wave 5 drops to its target, this may be an opportunity for the Primary Dealers to give GLD a boost into Options Expiration. Why? Investors will be stumbling over each other trying to go short on the next decline in an already crowded environment. This will provide easy pickings for the PDs to run the stops on these short sellers.

The decline isn’t over yet, by a long shot. The problem for the recent short-sellers is that they are now buying a lot more volatility than potential reward…that is until after options expiration, IMO.

Regards,

Tony

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As a State Registered Investment Advisor, The Practical Investor (TPI) manages private client investment portfolios using a proprietary investment strategy created by Chief Investment Officer Tony Cherniawski. Throughout 2000-01, when many investors felt the pain of double digit market losses, TPI successfully navigated the choppy investment waters, creating a profit for our private investment clients. With a focus on preserving assets and capitalizing on opportunities, TPI clients benefited greatly from the TPI strategies, allowing them to stay on track with their life goals

Disclaimer: The content in this article is written for educational and informational purposes only. There is no offer or recommendation to buy or sell any security and no information contained here should be interpreted or construed as investment advice. Do you own due diligence as the information in this article is the opinion of Anthony M. Cherniawski and subject to change without notice.

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