One thing stock market traders may have missed in the wake of the Google and Goldman Sachs sell-off Friday was that gold and crude oil prices also suffered similar declines as the stock market.
With that in mind, let’s take a quick updated look at the daily charts of GLD (Gold ETF) and USO (Crude Oil ETF) to see what levels are important for us to watch.
First, Gold GLD:
Quick sleuthing tells us that we need to be watching the $110.00 level as potential and key support, as that is the 50 day EMA but also the confluence of the rising ‘arc’ trendline as I’ve drawn.
A break under $110.00 could send us back to test lower support at $106.00.
However, the upper level to watch for a breakout remains the $114.00 per share level – the recent high and also prior price high from January.
It would be logical to expect a test of the highs at $120.00 perhaps if we do get a confirmed breakout above the price resistance at $114.00.
Finally, Crude Oil USO:
USO is not as ‘clean’ chart-wise as GLD, but we take what the charts give us.
Price broke above the $42.00 price level only to collapse back into the trading range, forming a potential bull trap – that’s not good for buyers.
However, the lower support level to watch on USO is $39.50, which is the 38.2% retracement as drawn but also the rising 50 day EMA (actually at $40.00). It’s also the support of a short-term rising trendline (not drawn).
A move under $39.50 could see a retrace back to the next support confluence at the $38.00 level… and lower if price breaks under $38.00.
We see the similar negative volume divergence in USO as we do in the broader stock market ETFs (SPY, DIA, QQQQ, etc).
For detailed analysis and charting on the monthly, weekly, and daily frame, take a look at our premium Weekly Inter-market Report service.
Corey Rosenbloom, CMT
Afraid to Trade.com
Follow Corey on Twitter: http://twitter.com/afraidtotrade
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