Market Timing Brief for the Gold ETF (GLD) and 10 Year Treasury Yield (TNX) Closes On 3-21-2014: Falling Rates Will Drive the Next Leg Up in Gold

A Market Timing Report based on the 3-21-2014 Close published Sunday March 23, 2014

UPDATE 3-24-2014 @ 8:42 pm: GLD is testing below the 1st support level (red line) shown on the chart below.  Not optimal for the rally, but the 50 day moving average would be the next test at about 125.19.  Below there we’d see much more damage and potentially the end of the rally. 

TNX, the 10 Year yield is retesting the prior minor high, and that high needs to hold.  If not, gold will likely continue to fall.

Gold did some front running of the Fed statement and began selling off as the 10 Year Treasury yield also rose prior to the statement.  The dance is perfectly choreographed.  By the time the post-Fed reaction hit the fan, rates had already bumped up against resistance.  Now they could have gone straight up from there, but they didn’t.  In fact, rates fell on Friday and gold rallied right on cue.

Check out the two charts below.  Chartwise this is a set-up for the next leg up for the gold Bull market of 2014.  Read the caveats from last week to know what could end the party prematurely.  But for now, it’s a Bull that simply pulled back to support.  Below support, that next red support line comes into play.  And if you see rates blast through obvious resistance just overhead, gold will suffer.

GLD chart:

gld-gold-etf-market-timing-chart-2014-03-21-close

Gold Pulls Back but is Set Up for Next Rally

Ten Year Treasury Note Yield Chart (TNX, TLT, TBT):

tnx-10-year-treasury-note-market-timing-chart-2014-03-21-close

Rates Rise Abruptly Post-Fed Statement, but Then Fall

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Look for updates on the main chart tracking pages this week as I feel they are needed and comments via Twitter @SunAndStormInv (see link to upper right).

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