GLD and FXE in Oversold Territory

The high of GLD barely touched it 200-day simple moving average yesterday and then dropped 3.5% towards long-term support near $150. FXE also dropped just above long-term support near the low of January of this year at $128.42. Both are in oversold territory and a bounce back should be expected from current levels but the magnitude and duration cannot be predicted at this point.

For GLD, the 14-day RSI is at 28.06. The MEI(14), my proprietary indicator, is confirming the RSI(14). This market may move a little lower before rebounding.

It is interesting that market participants did not pay any attention to the popular 200-day moving average and moved below it like it wasn’t there. So mush for the noise some well promoted websites made about the value of this average. Any average, or pattern, in general, on any chart has significance if many actual participants assign a significance to it. When fundamentals are more important than technicals, some patterns may not have the significance some people who are not participants assign to them. I leave the details as a thought exercise.

FXE, the ETF that tracks the movement of EURUSD, has RSI(14) of 27.57, a value that is near rebound values of the past. In this case the MEI(14) is not confirming the RSI(14) on the last day because it inched upwards . This may be a sign of a pending rebound, the magnitude and duration of which cannot be predicted at this point.

Charting program: Amibroker (Charts created with AmiBroker – advanced charting and technical analysis software.”)

No relevant positions at this time.

Disclaimer:The author is not a financial advisor and does not recommend the purchase of any security or advise on the suitability of any trade or investment in any timeframe. ETF, stock, futures, forex and options trading and investing involves substantial financial risks and can result in total loss of capital. If investment or other professional advice is required, a licensed professional should be consulted.

This entry was posted in Technical Analysis and tagged , , . Bookmark the permalink.