With all the hype about Gold recently it would reasonable to assume that a mini crash like the one we had on the $SPX in late April 2010 could come to fruition soon. Why ? Well, if you look at the chart of the $SPX back then, you can find striking similarities. The same RSI reading of 80. Way stretched above the 50 and 200 day mov avg. An uptrend of 2 months without any correction. I wouldn’t be surprised to see Gold pullback very very sharply as the SPX did in late April 2010.
To sum it up .. expect a 10% pullback on Gold at least in a heartbeat ! After all I’m the one who warned about a flash crash in the SPY when we were trading at SPY$119 in early May (Click Here).
Here is the analogy … enjoy boys and girls!!