Long Trade Ideas for SPDR Gold Shares ETF (GLD)

02/12/2018 3:24 pm EST

Focus: COMMODITIES

Landon Whaley

Editor, Focus Market Trader

As long as GLD trades above $121.50, then new long trade ideas can be initiated on declines to $123.64, or lower. Depending on how much room you want to give this trade idea, use a risk price between $122.23 and $121.50, writes Landon Whaley of Focus Market Trader.

The SPDR Gold Shares ETF (GLD) declined 1.3% in the week ending February 9 and has gained 0.91% to start 2018.

The Gravities

GLD’s Fundamental Gravity is being primarily driven by the latest Fed rate hike, which is bullish.

The Quantitative Gravity is giving us mixed signals right now.

Social, our proprietary trend indicator, is signaling GLD is in take a breather mode after starting 2018 partying.

Barometric, a measure of buying pressure, is bouncing off the lowest levels in twelve months, heading higher.

And finally, rounding out the trifecta of quantitative components, is Momo, our measure of force behind the current trend. Like Barometric, Momo is also bouncing off lows and making its way higher.

Behaviorally, investors have yanked $427MM from GLD during 2018, which means investors have yanked over $500MM in just the last five trading days. In gold futures, institutional investors are leaning slightly long, but are extremely underweight compared to their average positioning over the last twelve months.

The Bottom Line

GLD’s Fundamental Gravity is bullish, the Quantitative Gravity is neutral, and the Behavioral Gravity is bullish, because of retail investors are turning bearish and institutional investors aren’t bullish enough.

When the three Gravities stack up this way, we hold a long bias and pay careful attention to further deterioration in the Quantitative Gravity.

The Trade Idea

chart

As long as GLD trades above $121.50, then new long trade ideas can be initiated on declines to $123.64, or lower.

Depending on how much room you want to give this trade idea, use a risk price between $122.23 and $121.50. If GLD touches your risk price, even for a second, then you should exit any open trades.

If the trade moves in your favor, then you could consider using the price range between $129.61 and $131.15 as your profit target.

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