For the past four sessions, and since it thrust above its declining 50-day moving average, the streetTRACKS Gold Shares (GLD) has consolidated above the 50-day MA in what appears to be a bull flag formation that should resolve itself in a thrust towards the May '06-July '07 resistance line, now at 67.80. At this juncture, only a sustained break of the 50-day MA will begin to compromise the developing bullish scenario.

Comparing the GLD to the U.S. Oil Trust ETF (USO), while the USO certainly has outperformed the GLD on the upside during the past six weeks, the USO also outperformed on the downside from last year's July peak into Jan. '07. Put another way, The GLD has been much less volatile, and thus exhibited considerable relative strength vis-a-vis the USO.



Mike Paulenoff is a 26-year veteran of the financial markets and author of MPTrader.com, a real-time diary of his technical chart analysis and trading alerts on all major markets. For more of Mike Paulenoff, sign up for a free 15-Day trial to his MPTrader Diary by clicking here.