Watch Video Version: 5 Reasons Stock Market NOT To CRASH, Gold & Silver Price to TANK
DOWNTREND CHANNEL
In early April, Gold Shares prices attempted to break above the Downtrend Channel (see red circle); if succeeded, that would’ve been a start of something. But with failed breakout comes fast move to the opposite direction, and as we can see in the chart below we are already seeing the reversal here.
To make things even worse for the buyers, we have formed ‘bearish divergence’ on the MACD oscillator. This divergence occurs when there is one final push from the buyers and the sellers take advantage of the situation. This is bad because, it is happening below the ‘downtrend channel’ and after the failed breakout; it is like spraying gas in the fire.
If the price starts to decline below $115, I think the price could continue to deteriorate, in the worst case scenario, all the way back down to the bottom of the channel support at $100-95ish.
GLD, SPDR GOLD SHARES, DAILY-CHART
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“OVERBOUGHT” STATUS
Looking at the weekly-chart below, we can see that the price is now falling after hitting the “overbought” status level on the Stochastics oscillator. Again, to make things worse, we have formed another bearish divergence in this weekly-chart now. Weekly-scale divergences are actually more potent than the daily-chart, and when they form together (daily & weekly) like this, it’s a receipe for a disastrous outcome.
If we don’t see the buyers reclaiming the price above $120 in the near term, I think the sellers are going to bring this thing down pretty hard as they are already preparing to have a party for months on Gold Shares. To learn more when to start investing on Gold, watch this video.
GLD, SPDR GOLD SHARES, WEEKLY-CHART
*Comprehensive Long-Term Analysis: [Video] Gold, Silver, Miners: When You Should Start Investing
