The big picture that is evolving in the SPDR Gold Shares (GLD) shows that yesterday's high at 139.00 represented the third failed attempt to hurdle and sustain above 139.00 during the past eight weeks. Today's sharp gap-down open and downside follow-through (so far) leaves behind a triple peak that is putting increasing pressure on the Nov-Jan support line, which cuts across the price axis today at 134.75.

Let's notice that the rising 50-day moving average also is in the vicinity of the near-term support line, at 134.58, which adds more significance to a violation of the 134.75/50 support area.

If 134.75/50 is violated and sustained, given the pressure exerted by the triple peak, it could trigger an avalanche of selling pressure that drives the GLD towards 130.00-129.80 quickly.

 

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