What is Compression? 4 Inside Weeks in GLD

May 12, 2020

Mish's Daily

By Mish Schneider

blankCompression, decrease in volume of any object or substance resulting from applied stress. Compression may be undergone by solids, liquids, and gases and by living systems.

And apparently by gold.

What is the applied stress in gold?

For one, too many bears.

Secondly, a relatively strong dollar.

Third, rising yields, although today yields did soften.

Fourth, a belief in the recent rally in equities abating investors fears to a degree.

Yet, even with all that, gold has not sold off.

In fact, the compression is both interesting and prophetic.

Interesting, in that the stories about gold bullion shortages are priced in the market.

Prophetic, in that the price is having a 4th inside week relaying that the hope is more like wish.


Note the trading ranges of the last four weeks.

Week one had the largest trading range-157.04-163.60.

Week two-157.80-162.00 or inside week one

Week three-158.10-162 or inside week one and week two

Week four thus far-158.89-160.95 or inside week one, two and three.

Compression force is the force generated from compressing an object or substance, which is a common use of physics in powering most hand tools.

Compression force can be visualized by placing an object on a spring. When the spring is compressed and then released, the object is ejected into the air.

Will gold find its compression force to eject the price into the air?

Exactly what we are watching for.

Monday, I made my debut on Yahoo Finance “The First Trade.” I look at new concepts in our pandemic world by examining small cap stocks and ETFs worth watching.

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S&P 500 (SPY) Broke the 10-DMA on the close-285 will be key support

Russell 2000 (IWM) 128.50 or the 10-DMA broke now pivotal

Dow (DIA) 240 or the 10-DMA broke now pivotal

Nasdaq (QQQ) 229.32 gap never filled. 220 support

KRE (Regional Banks) Key to this selloff-did not follow & showed early weakness. 30 support

SMH (Semiconductors) 133 pivotal

IYT (Transportation) 140 the must hold

IBB (Biotechnology) 128 key support. I hope my video explains why we did not chase this

XRT (Retail) 38.43 last swing high. 36.80 support to hold

Volatility Index (VXX) Sure returned today. 35.00 support

LQD (iShs iBoxx High yield Bonds) FED buying did not do much. 127.30 must clear

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