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Looking Longer Term at GLD

The technical picture appears to be getting worse rather than better.
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The Bank of Japan gave us a little jolt here at the open this morning, not necessarily of bullishness, but a shot of volatility.

But the news has been received as bullish. Another government is tossing massive amounts of liquidity into the system, so why wouldn't it be? It is certainly giving the Nikkei a push and crushing the yen. Still, gold doesn't seem to be reacting well to all this monetary activity.

I'm taking my focus off the short term in the SPDR Gold Trust Shares (GLD) and revisiting the weekly and monthly charts, which were covered on "Mad Money" a few months back. While GLD is well off its highs from last October, the technical picture appears to be getting worse rather than better. Price is pressing major support levels here. Any close below $147.50 opens up another $10 to the downside. Momentum is dead here. There is a chance the RSI breaks this downtrend before price, which is one thing the bulls really need to see here. This setup makes it hard to short GLD right here, right now as the chance for a bounce are very real. But if you choose to go long, then keep a very tight stop because I believe bears will get aggressive if GLD shows much more weakness.

SPDR Gold Trust (GLD) -- Weekly

Source: StockCharts.com

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Pushing my view out further doesn't help the bulls' case any. In fact, it significantly hurts the bulls case. GLD has lost price support on the monthly chart. Stochastics have just entered oversold territory and when you are talking about a monthly chart that means it could be 10 or 12 more weeks before we become oversold enough for folks to justify buying something that is too oversold. Furthermore, RSI has just broken below the midline, so it has a long way it could fall.

SPDR Gold Trust (GLD) -- Monthly

Source: StockCharts.com

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Here, I'm not looking for $10 on the downside. Here, we are talking more like $20-25 on the downside. So, why haven't I jumped in yet? Well, this is a monthly chart and we are still early in the month, so GLD still has to reverse the price pattern and recover support.

At the time of publication, the author had no positions in any of the securities mentioned.