Now that all of the "I told you so's," and market "revisionists" are telling us that gold is a terrible "defensive position" and no one should have thought otherwise, let's have a look at what the multi-month technical set-up indicates in the SPDR Gold Trust (GLD).

My pattern and momentum work argue that the current decline in the GLD from the May 12 high at 122.24 into today's low at 116.08 represents a correction in an ongoing bull market, rather than a reversal into a much more bearish trend. Only a sustained break beneath the eight-week up trendline, now at 115.30/40, and downside follow-through that breaks 113.13 (May 5 pivot low) will inflict significant-enough damage to an otherwise still dynamic technical set-up to trigger neutral signals.

In the meantime, my near-term work is telling me to expect a meaningful low in the hours directly ahead.

 

Mike Paulenoff is a 26-year veteran of the financial markets and author of MPTrader.com.