Gold looks ready to begin a sustained bull market in the foreseeable future. I'm going to do a thread of blog posts applying Wyckoff analysis to pick optimal entry points in Gold ETFs and Gold Miners. The objective of the series is to show analysis of price structures and expectations of future price action. I'll conduct post-trade analysis as it'll be a helpful learning experiencing for myself and readers - it'll also add accountability.
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GLD ETF WEEKLY CHART 2011 - 21 JUNE 2019
Let us begin with the above weekly chart, GLD ETF, that will be used as a proxy for Gold.
By contextualising what we see on the chart applying Wyckoff analysis we can start to build an investment thesis. The price peaked in September 2011 and declined circa 38% to the SCLX low in June 2013. From the SCLX low GLD had a swift price advance of nearly 20% in 2 months, this point is labelled as the AR. The SCLX low and AR high are used as the outer boundaries for the trading range.
The chart shows GLD moving through the accumulation phases. My current analysis is that GLD is now within Phase D of an accumulation trading range (TR). My conviction is increased due to the events within Phase C. Specifically, the LPS, which also performed a BU action to the down-sloping long term resistance line (pink line). One can see the LPS area had a demand wick that touched the pink line on an increase in volume. This shows that demand at this point increases to stop the downward movement. The next 8 weeks the price remains below the SCLX low on below average volume. The following price action that pushes the price back into the TR on increased volume shows that supply had diminished and was becoming exhausted. The combination of the LPS action and BU action to the pink line followed by increasing volume and a price advance into the TR shows that demand was dominant.
Following the price advance on expanding spread and volume from Phase C to Phase D there was a small pullback in price of circa 6% on average and below average…
