Recently, I discussed gold and the SPDR Gold Shares (GLD), which has been a liquidating market. The GLD closed at 113.50 off a low of 113.21, and the 200-day moving average is 112.06.

The relative strength indicator points straight down, which leads me to believe the GLD will test the average and I want to stay in for that test to see if it gets some sort of reversal from there. If it doesn't and can't seem to rally off of average, then I will stand aside and let it go down another $5 and see what it looks like down at 104-105, the next area for it to hold logically and where I'd be looking to get long again.

If it breaks the prior low from February at 102.28, then I think we're looking at 93, or $930 an ounce.

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