Why The GLD ETF Is Bearish

Let’s look at three charts of GLD with the first showing a possible Inverse Head and Shoulders pattern.

This pattern, like the larger one below, is disproportionately large relative to the decline it may reverse, and thus looks more like a Symmetrical Triangle that may break to the downside. Let’s treat both sides, then, and those are $157.76 for downside confirmation for a target of $147.77 while upside confirmation occurs at $163.20 for a target of $173.19.

Turning to the chart below, it is quickly clear that GLD is beautifully fractal and that it is trying to reverse its 3-year uptrend.

Those issues of proportion quickly jump out too and so it makes sense to simply skip to the two sides of the larger Symmetrical Triangle with the downside confirming near $148 for a target of about $111 while the upside confirms at $174 for a target of about $222. In turn, fulfillment of the smaller Sym Tri in either direction will serve to confirm the larger pattern.

One reason to believe it will be to the downside besides the reversal of GLD’s long-term uptrend is shown in the monthly chart below.

It is showing a very powerful Pipe Top from last August and September that has fought off a weak Pipe Bottom between December and January, and thus it seems the topping pattern is more likely to prevail.

Before looking at those numbers, though, let’s  look at the Pipe Bottom too in the case that it comes back and it confirms at $170.80 for a target $193.33, and thus an upside breakout of the small Symmetrical Triangle would confirm it as well.

It is the Pipe Bottom, though, that looks stronger and it confirms at $154.19 for a target of $122.54 and a level that is not so far from the downside target of the larger Symmetrical Triangle and perhaps another reason to believe it breaks that way.
 
In fact, based on the combination of these many charts, it seems fair to say that GLD is bearish and possibly very bearish.