As most market observers know, gold put in a phenomenal rally from 2002 to 2011. GC1 futures data shows about a 650% rally low to high. But since then a lot has been given back, about 50%. In this ever more digital age, will gold ever regain its luster? (Sorry.) Using pivots we don't have to guess. Let's look at the long term levels when gold was in a decent uptrend versus the last few years.
To make it simple I am showing only the YP (yearly pivot) and HPs (half-year pivots) without any support or resistance lines on the GLD weekly chart. As you can see 2009 to 2011 was all above pivots with each touch a perfect buy chance or hold.
Then something changed in 2012 and that was a break of both the HP and YP. It was able to recover, but then put in a lower high. The start of 2013 showed trouble from the start with a clear rejection of both the 1HP and YP. This is often (not always) a bearish sign in the market, and sure enough 2013 had a big drop.
Even if you thought bankers were destroying currency and wanted to own gold, pivots showed to be less allocated or better out of any asset that is below all pivots. If you restricted your buying attempts to weeks above a long term pivot, then 2013 in and out, 2014 and 2015 a few tries that would not have cost much.
There hasn't been any buy signal at all in more than a year, as GLD has been completely below long term pivots from February 2015 to recently.
GLD did close a bit above 1HP the first week of the year, but not with a look of support. Also, the futures failed so given the trend there were two reasons to wait. With 3 trading days left in the week, it is possible that gold is giving the best looking long term buy bar in about a year.
Very simple: if the move is for real then gold stays above the 1HP and will then clear the YP. If the YP smacks it down and it breaks the 1HP, then the trend is still down. It could stay congested between the YP and HP for a while, although that is a tight range which will break one way or the other at some point.
Now let's zoom into the daily chart with all pivots. Look at at the October bounce. If you bought 10/2 , the first day above a quarterly pivot in months, then you had a chance for gain or the worst case small loss when exiting early November. Note I am not even qualifying this as a long term buy, because GLD was not above a half year or yearly level at the time.
GLD has been above the JanP after being below monthly pivots for 2 months straight, and now this is the 2nd time above the 1HP / Q1P combo (hard to see because same level) at 105.22. Above that is bullish because now a market that was very beat up is suddenly above 3 pivots. Then the all important YP is not far and may test.