Cisco Systems, Inc. (CSCO), Wal-Mart Stores, Inc. (WMT): Market Outlook, Short the Market If This Happens

The recent rally in GLD is in part due to the fact that so much selling has been completed. Selling pressure pushes prices down, and without that pressure, the price of gold seems to have stabilized.

GLD should continue to move higher over time. Large gains like we saw last week will probably alternate with large losses in the months ahead as gold tries to form a bottom that can provide support to long-term gains. Last week’s move appears to be unsustainably rapid.

The chart above shows that the 26-week rate of change (ROC) of GLD is near its upper Bollinger Band. This is an indication that a short-term top is likely near.

This Week’s News

Wal-Mart Stores, Inc. (NYSE:WMT), Macy’s, Inc. (NYSE:M), Nordstrom, Inc. (NYSE:JWN) and Kohl’s Corporation (NYSE:KSS) all warned of a possible slowdown in consumer spending last week. Traders will be watching reports from other well-known retailers this week to see if that trend continues.

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