This post was published earlier on ZYX Short Sell Change Alert.
The resent action in gold has established a major support at $1636 to $1641.
20% of the full core position size is being held in GLD.
Will gold break the support or bounce from here? The answer depends on how the Spanish bond auction will go tomorrow morning.
If the auction goes well, expect a break of the support. The next support level is $1590 to $1600.
If the auction goes poorly, expect a bounce to $1720 to $1730.
The way we recommend handling this uncertainty is to maintain a small core short position that an investor is comfortable with and trade around it.
What To Do Now?
Those holding GLD short and holding less than 30% full core position size may continue to hold.
Those who are holding a larger short position may consider taking partial profits right here around $1640 on near term gold futures contracts. Equivalent in GLD ETF is $159.31.
Those not in gold and are super aggressive may consider initiating a 5% tranche in GLD right here at $159.31.
Most investors who are not short gold may not enter at this point and wait for another signal on the Real Time Feed (RTF).
