Tuesday, August 31, 2010

GLD -- volume check

The gold market is close to embarrassing me, yet again. Still, I feel compelled to point out the lack of volume in GLD on this latest rally.

In fact, the volume oscillator shows more resemblance to the end of a correction than it does to a burgeoning rally.

On the equivolume chart below you can see a pattern of successively lower volume on each high. That often indicates a shift in trend is around the corner.

The counterargument would be that the latest rally has barely started and volume is sure to expand as soon as the momentum players come to play in the precious metals complex.

I don't know. Just seems to me that the metals are already pretty saturated with momentum oriented traders. But I guess more could come along. We'll see.