{"id":4407,"date":"2016-02-04T06:27:45","date_gmt":"2016-02-04T11:27:45","guid":{"rendered":"http:\/\/www.morpheustrading.com\/blog\/?p=4407"},"modified":"2022-04-06T15:05:02","modified_gmt":"2022-04-06T19:05:02","slug":"buy-gld-etf-2016","status":"publish","type":"post","link":"https:\/\/morpheustrading.com\/blog\/buy-gld-etf-2016\/","title":{"rendered":"Why It&#8217;s Time To Buy Gold Right Now!"},"content":{"rendered":"<p><img loading=\"lazy\" decoding=\"async\" class=\"alignright size-medium wp-image-4413\" src=\"https:\/\/www.morpheustrading.com\/blog\/wp-content\/uploads\/2016\/02\/goud-ETF1-300x157.jpg\" alt=\"gold ETF\" width=\"300\" height=\"157\" title=\"\" srcset=\"https:\/\/morpheustrading.com\/blog\/wp-content\/uploads\/2016\/02\/goud-ETF1-300x157.jpg 300w, https:\/\/morpheustrading.com\/blog\/wp-content\/uploads\/2016\/02\/goud-ETF1-110x58.jpg 110w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/>After an uneventful 2015 and a rough start in\u00a0the new year, the stock market may\u00a0not seem\u00a0very appealing to investors and trend traders lately, but <em>stay positive<\/em> because there&#8217;s always an opportunity for astute traders who aren&#8217;t afraid to look in the market&#8217;s nooks and crannies.<\/p>\n<p>Right now, there is an excellent, stealth opportunity in gold and this article will clearly show you why <strong>gold is shaping up to be a great place to park some\u00a0cash<\/strong> in 2016, especially if you&#8217;re looking for a trade or investment with solid return potential and minimal stock market correlation\/risk.<\/p>\n<p>For simplicity sake, we&#8217;ll discuss and look at charts of the actual spot gold futures, but will share the simple ETF investing opportunities at the end of this post.<\/p>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">TABLE OF CONTENTS<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/morpheustrading.com\/blog\/buy-gld-etf-2016\/#Gold_Starts_To_Shine_Again\" >Gold Starts To Shine Again<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/morpheustrading.com\/blog\/buy-gld-etf-2016\/#Breakout_Buy_Entry\" >Breakout Buy Entry<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/morpheustrading.com\/blog\/buy-gld-etf-2016\/#The_Gold_Plan\" >The Gold Plan<\/a><\/li><\/ul><\/nav><\/div>\n<h3><span class=\"ez-toc-section\" id=\"Gold_Starts_To_Shine_Again\"><\/span><strong>Gold Starts To Shine Again<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>After clearing the highs of a two-month long trading range in the 1050 to 1085 area, spot gold futures\u00a0broke\u00a0out above intermediate-term resistance to a new 3-month high in late January.<\/p>\n<p>This bullish momentum caught our attention, which prompted us to buy SPDR Gold Trust ($GLD) in the <em><a href=\"https:\/\/www.morpheustrading.com\/services\/swing-trade-alerts\" target=\"_blank\" rel=\"noopener\">Wagner Daily<\/a><\/em> newsletter on January 27 (more on the buy entry in a bit).<\/p>\n<p>Take a look at the <em>daily<\/em> chart of gold futures below, then follow the price action with the concise technical commentary that follows:<\/p>\n<p><img decoding=\"async\" src=\"https:\/\/www.morpheustrading.com\/\/%7Erick\/\/charts\/2014\/160203GOLD1.png\" alt=\"$GOLD DAILY\" title=\"\"><\/p>\n<p>The first bullish signal in gold was the breakout above range highs <span class=\"__postbox-detected-content __postbox-detected-date\">(around 1,085) on January 6,<\/span> which coincided with a close\u00a0above the <span class=\"__postbox-detected-content __postbox-detected-date\">50-day<\/span>\u00a0moving average (blue line) for the first time in several weeks. Volume started picking up as well, confirming increasing demand.<\/p>\n<p>The price action of gold also\u00a0set a higher closing high, taking out the previous high of <span class=\"__postbox-detected-content __postbox-detected-date\">1084 (from\u00a0December 4).<\/span><\/p>\n<p>A few days later (January 14), gold pulled back\u00a0to the 1070 area and undercut the <span class=\"__postbox-detected-content __postbox-detected-date\"><span class=\"__postbox-detected-content __postbox-detected-date\"><span class=\"__postbox-detected-content __postbox-detected-date\">50-day<\/span><\/span><\/span>\u00a0MA, but the shakeout was short-lived and the shiny commodity\u00a0recovered back above that key indicator of intermediate-term trend (another bullish sign).<\/p>\n<p>After holding above the rising <span class=\"__postbox-detected-content __postbox-detected-date\"><span class=\"__postbox-detected-content __postbox-detected-date\"><span class=\"__postbox-detected-content __postbox-detected-date\">20-day<\/span><\/span><\/span>\u00a0exponential moving average, the price action consolidated in a tight range <span class=\"__postbox-detected-content __postbox-detected-date\">January 21<\/span> &amp; 22, setting up the 1110 area as a breakout pivot.<\/p>\n<p>As\u00a0the price action tightened up, notice that the <span class=\"__postbox-detected-content __postbox-detected-date\"><span class=\"__postbox-detected-content __postbox-detected-date\"><span class=\"__postbox-detected-content __postbox-detected-date\"><span class=\"__postbox-detected-content __postbox-detected-date\">50-day<\/span><\/span><\/span><\/span> MA started to trend higher as well (another bullish sign), after the <span class=\"__postbox-detected-content __postbox-detected-date\"><span class=\"__postbox-detected-content __postbox-detected-date\">20-day<\/span><\/span>\u00a0EMA\u00a0crossed above the <span class=\"__postbox-detected-content __postbox-detected-date\"><span class=\"__postbox-detected-content __postbox-detected-date\"><span class=\"__postbox-detected-content __postbox-detected-date\">50-day<\/span><\/span><\/span> MA.<\/p>\n<h3><span class=\"ez-toc-section\" id=\"Breakout_Buy_Entry\"><\/span><strong>Breakout Buy Entry<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>On January 26, gold triggered a buy signal for us, as it cleared the prior swing high on the biggest volume it has seen since it started basing out.<\/p>\n<p>One day later, we notified subscribers we were purchasing SPDR Gold Trust ($GLD), a popular gold ETF, in our <strong><a href=\"https:\/\/www.morpheustrading.com\/services\/swing-trade-alerts\" target=\"_blank\" rel=\"noopener\">trading newsletter<\/a>\u00a0<\/strong>because we were\u00a0looking for momentum to continue building over the next several weeks.<\/p>\n<p>But as always, we did\u00a0<em>not<\/em>\u00a0buy based solely on the short-term daily chart. Rather, we used multiple time frames to look for confirmation that gold is head in the right direction.<\/p>\n<p>Upon looking at the longer-term charts, we spotted a multi-year trend reversal shaping up on the\u00a0<em>monthly<\/em> chart of gold futures. Check it out:<\/p>\n<p><img decoding=\"async\" src=\"https:\/\/www.morpheustrading.com\/\/%7Erick\/\/charts\/2014\/160203GOLD2.png\" alt=\"$GOLD Monthly\" title=\"\"><\/p>\n<p>The monthly chart above\u00a0shows gold tightening up into a descending wedge like pattern throughout much of 2015, followed by a downtrend line breakout and move above\u00a0the <span class=\"__postbox-detected-content __postbox-detected-date\">10-month<\/span> moving average (similar to 200-day MA) this month.<\/p>\n<p>When we bought the gold ETF on January 27, $GLD had <em>not<\/em> yet\u00a0broken out above that long-term downtrend line.<\/p>\n<p>However, we were comfortable with an early entry because it gave us the chance to more easily sit through the volatility that typically occurs when a stock\/ETF breaks through a major level of price resistance (such as a multi-year downtrend line).<\/p>\n<h3><span class=\"ez-toc-section\" id=\"The_Gold_Plan\"><\/span><strong>The Gold Plan<\/strong><span class=\"ez-toc-section-end\"><\/span><\/h3>\n<p>Now that we have established a position in a Gold ETF, we are looking for $GLD to trend higher in the short-term, while holding above near-term support of its rising <span class=\"__postbox-detected-content __postbox-detected-date\"><span class=\"__postbox-detected-content __postbox-detected-date\"><span class=\"__postbox-detected-content __postbox-detected-date\">20-day<\/span><\/span><\/span> EMA.<\/p>\n<p>Then, if the price action is able to trend higher for a few more weeks, we expect intermediate-term trend to really pick up bullish momentum and send gold substantially higher.<\/p>\n<p>In that case, the first pullback to the rising 50-day moving average\u00a0should offer another low-risk entry point for those who prefer a little more price confirmation before taking advantage of this stealth trade setup.<\/p>\n<p>The easiest way to trade gold is to buy one of several different gold ETFs. Depending on your trading\/investment objectives, you can choose from an ETF that simply moves in parity with spot gold futures ($GLD)\u00a0<em>or<\/em>\u00a0step up the volatility (and risk) through buying one of the leveraged gold ETFs instead ($UGLD moves at roughly 300% the percentage change of spot gold).<\/p>\n<p>Check out this <a href=\"https:\/\/etfdb.com\/type\/commodity\/precious-metals\/gold-etf\/\" target=\"_blank\" rel=\"noopener\">handy list of all 16 gold ETFs<\/a> traded in the US markets, choose your weapon, and enjoy the fact that you&#8217;re now chilling with an ETF that shows promising upside potential, while also offering a <em>low correlation<\/em> to the direction of the equities markets.<\/p>\n<p><em>DISCLOSURE:<\/em> We are presently holding a position in SPDR Gold Trust ($GLD), which we bought per our <strong><em><a href=\"https:\/\/www.morpheustrading.com\/services\/swing-trade-alerts\" target=\"_blank\" rel=\"noopener\">Wagner Daily<\/a><\/em><\/strong> trade setup on January 27.<\/p>\n<p><em>Planning to buy some gold, or have done so already? We&#8217;d love to hear about it, so drop us a comment below.<\/em><\/p>\n<div class=\"cfmonitor\" style=\"padding-top: 30px;\"><center><script src=\"\/\/pagead2.googlesyndication.com\/pagead\/js\/adsbygoogle.js\" async=\"\"><\/script><!-- Footer of content - Large --> <ins class=\"adsbygoogle\" style=\"display: inline-block; width: 336px; height: 280px;\" data-ad-client=\"ca-pub-7565144363001883\" data-ad-slot=\"6017996961\"><\/ins><script>\/\/ <![CDATA[\n(adsbygoogle = window.adsbygoogle || []).push({});\n\/\/ ]]><\/script><\/center><\/div>\n","protected":false},"excerpt":{"rendered":"<p>After an uneventful 2015 and a rough start in\u00a0the new year, the stock market may\u00a0not seem\u00a0very appealing to investors and trend traders lately, but stay positive because there&#8217;s always an opportunity for astute traders who aren&#8217;t afraid to look in the market&#8217;s nooks and crannies. Right now, there is an excellent, stealth opportunity in gold [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_links_to":"","_links_to_target":""},"categories":[3],"tags":[],"class_list":["post-4407","post","type-post","status-publish","format-standard","hentry","category-stock-trading-strategy"],"_links":{"self":[{"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/posts\/4407","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/comments?post=4407"}],"version-history":[{"count":1,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/posts\/4407\/revisions"}],"predecessor-version":[{"id":11278,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/posts\/4407\/revisions\/11278"}],"wp:attachment":[{"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/media?parent=4407"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/categories?post=4407"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/tags?post=4407"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}