Gold enthusiasts take note - this rally is at risk for rolling over, so watch these levels

Gold can be meeting a c=a symmetry target here, measuring from 84.92 in the GLD chart (below). The faster-moving indicators like the StochRSI remain positive, but the slower ones do not yet indicate that gold is embarking on a big wave 3 up. If you're bullishly thinking that it does go up in a big wave 3, then you've got to recognize that it has no business going under its 50-day moving average, so you can at least watch that level (currently 89.35 in GLD). Given the symmetry price gold is reaching today, we've got to bear in mind that there are resistance levels at the late February high and more recent mid-March high. I've got to caution, don't be a hero on gold long unless it pushes above those levels to make them support. Otherwise, there are very significant risks to the downside for gold. Being defensive on gold isn't too hard when these resistance levels are nearby and clear. Gold continues to be talked up by so many folks but it will need plenty of new buying to clear resistance. If that doesn't happen, and if gold instead rolls over to test the October 2008 lows, I would not want my readers to say that they weren't warned. From all that I am seeing, the indications are that a move by gold to the downside is the most probable path from these levels.

For those interested in an explanation of why the fundamentals do not favor gold, at least in this time frame, here's one concise statement of it: GOLD LOSING ITS LUSTER? (THE PRAGMATIC CAPITALIST, 5/13/09). (I see this article is recommending yen rather than either gold or the dollar. I don't know yet about the yen, still sizing up that chart but at least we have some levels to watch in the $XJY chart as I've posted from time to time. Same with the dollar, we have the levels that I've posted about just in the past few days here.)