APRIL 26 (Saturday Update added here)
In Trending markets, investing with a bias can be profitable. At other times, however, like possible turning points or periods of volatility, you have to be willing to change direction FAST and Leave out any BIAS until direction is established. That said, lets quickly review the recent action in GDX.
After a nice Dec to March Bull run in GDX , we got a false break out and an Impulsive drop. A tag of the 50sma & rejection (while Gold was up & $USD was down) alerted us to go short. THIS CHART shows that I thought we were in for another impulsive wave down.
THAT was April 14th, the Short was profitable. Since then, my April 25th report (which can be read following this one) showed that GDX is possibly morphing into a long position? I went long and here is my update of GDX from Fridays close—
Is is smooth sailing yet???…..
Please follow this chart below along with the commentary below it. The Comments are numbered matching the corresponding numbers on the chart.
1. BULLISH – Price broke to new lows in a “Shake out’ , “stop run” fashion – yet along with new Price lows, The R.S.I. & MACD did NOT make new lows = Divergence . R.S.I. crossed 50% , MACD Hist pops above 0 line
2. CAUTION – Price was rejected at the 50SMA, and now is sitting tight under the 200sma. Rejected here too? Possibly, or surge thru , possibly even Gapping over? Time will tell , Monday could be interesting.
3. Very Interesting to me– LOOK CLOSELY at the Money Flow (see Orange dotted line). The last GDX rally Left of the Orange line pushed money flow BEARISH EXTREME. The sell off and Tiny Rally (right of the Orange line) pumped it into the Green bullish area. It seems to show bullish money flow, and is worth pointing out. Going into the close I saw GDX have volume of 15 million with 15 minutes of trading left… it doubled in the last 15 minutes .
So I am NOT saying its all Bullish Smooth Sailing from here, I’m just showing what I am watching for Monday. The FED will likely stir the pot Next week, so if MONDAY pushed price over the 200sma, I will raise my stop there.
We can still get another impulse wave down if the 200sma is rejected too, so keep the hairs on the back of your neck raised & STAY FROSTY my friends.
On FED WEEK, ANYTHING CAN HAPPEN!
APRIL 25 (original report)
In my last report I was looking at the set up in Miners & the Markets – Smoooooth sailing right? Well sometimes the best you can do in markets that are WHIP-SAW Type is to Patiently hold mostly cash & pick your Lower Risk Entries when things get a little clearer. I expected more downside in GDX/GDXJ , however Yesterday the Miners took on a more Bullish looking set up. I have to wonder if they begin a short term rally into the Fed Mtg next week and then drop? Or is this the start of another nice leg up? This will only be known as it plays out, but heres what I was looking at … (Please excuse the typo on “Easily”)
This is a BULLISH SET UP and GDX is too …
APRIL 23 I was Tweeting that MINERS were doing the same that I just mentioned in $GOLD. They were taking the lead -doing a ‘stop run’, and buyers were scooping it up. Indicators like the MACD & R.S.I. were showing bullish divergence. With BUYERS stepping in, price didnt cascade down on that break of prior lows. If you know Miners, you know that they can really CAS-CADE- DOWN! They were likely being bought by smart money.
Those who follow CYCLES in $GOLD may be interested in this thought from April 23. I apologize that I dont have time to explain cycles to those not familiar, but it shows a possible end to the recent wave of selling, and it shows 2 waves up , 1 wave down (Shown)…now $GOLD could ‘bounce” and have another wave down (2 up, 2 down & test lows?) , possibly following the fed mtg next week, but we need ‘time’ and price action to show us the way this will play out.
QUICKLY, the Markets , the HYPE of great earnings , Buy the Dips , etc . I think we may be done upside for several reasons , but I was watching (Tweeted) this with QQQ’s for ex
April 4 – 200sma Test coming?
This pattern is trade-able , buy the lower blue line, sell the higher
You would have sold the open yesterday & watched for (read chart) …
I am starting to see MANY good looking set ups in various areas, similar to our prior set ups that have done very well! (From past reports, you can look at these charts, a few have told me they took these trades a month ago & just sold them...CONGRATS!! AAV. HK, AXAS, CPE, WRES, UPL, BAS and so on.) ENERGY has been doing very well for some time now.
SO I will be away this weekend, but I hope to get a report out on Monday morning with interest in some more areas that may be ready to move upward or at least setting up. For example Look at BTU , URZ & DNN bull flags (You can read about these Set ups in my previous report here), WRES was in my past report , CLF, COPPER, etc look good & I will add some higher priced stocks to this list. Also Some of these Miners may do a nice % -moves . So follow me on Twitter & you’ll be alerted to the next report or sign up on the front page for an email alert (Your privacy is respected, no email addresses are shared).
As always, thanks for stopping by & have a good Friday & weekend!
GDX has a Bullish set up