Big Top Formation in GLD

As we head towards Fed time at 2:15 PM ET, and release of another FOMC statement that could (is expected to) renew the committment to adding liquidity to the financial system, the developing big "M" top formation in the SPDR Gold Shares (NYSE: GLD) remains intact.

Let's notice that last week's decline from 139.54 twice found support in the vicinity of 133.90 prior to turning up yesterday in reaction to China's "wait-and-see" approach to climbing inflation. Today's action in the GLD also is "wait-and-see"... if the FOMC changes its "liquidity tune" in any subtle way via today's plicy statement. If not, then the GLD should react to the upside in another run at key resistance in the 137.50-139.50 target zone.

If the GLD either reacts sluggishly to such "good news," or if the news is not quite so "good," then the price structure should revisit critical support at 134.00-133.90, which also happens to be the coordinate of the July-Dec up trendline.  If breached, it will confirm a near term top in the GLD.

For now, as long as the GLD remains above the trendline, the bulls remain in directional control.