As predicted in our last article, after GLD fell through 114 it proceeded down pretty directly to the next level of support, 114. The 5-day chart of GLD shows the drop was pretty straight-line.
This illustrates one of the basic rules in technical trading. When things are rising, they tend to stop at resistance. When things are falling, they tend to stop at support.
This is because the market is a supply-and-demand situation. As economists’ failed attempts to “control the economy” demonstrate, the market is not all about putting “proper” valuations on things.