Trade Gold with PowerRatings, here’s how

In today’s


strategy we’re going to take a look at how you can use PowerRatings
to trade Gold. On November 18, 2004, streetTRACKS Gold Trust
Quote |
Chart |
News |
launched. GLD is listed on the NYSE and trades just like any other ordinary
stock. GLD is designed to track the price of gold and is priced at 1/10th of an
ounce of gold. At the time of this writing GLD is trading at $54.34 — which
means that gold is currently trading at $543.40.

The bull market in commodities has attracted many new investors looking to
increase investment returns. Until the launch of streetTRACKS Gold Trust the
only way you could trade gold was either through futures or by having to
purchase gold bullion, which incurs storage costs, etc. GLD changed all of that
by allowing anyone to buy or sell (short) gold. You can trade anything from 1
share upwards, so no matter how large or small your portfolio, you can have
exposure to gold — either for speculation or diversification.

Now that you understand the basics of GLD, it’s time to create a trading
strategy. And that is where PowerRatings comes in. Because GLD trades as a
regular stock, you can track it every day using PowerRatings. When GLD has a
PowerRating between 7-10 there is a high probability it will outperform the S&P
500 over the next 5 days and when GLD has a PowerRating between 1-3 there is a
high probability it will under perform the S&P 500. That means you would look
for buy signals when GLD has a high PowerRating and conversely you may look for
sell signals when GLD has a low PowerRating.

GLD currently has a PowerRating of 6, so it’s still in the neutral zone. The
chart of GLD is currently displaying a number of bearish technical
characteristics. It made a lower high in March than in February, then followed
that by making a lower low in March than in February. It has also fallen below
its 50-day moving average. On top of all that, when GLD reached its lowest price
last week, it failed to record a high enough PowerRating to justify a bullish
bias. So, while GLD could go higher, it’s not likely to outperform the S&P 500
over the next 5 days.

For more information on streetTRACKS
Gold Trust go to

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presented by Steve Primo, our Director of Education.

Ashton Dorkins