Expecting what?
Some people here have been waiting patiently to pounce…
On what? On the GOLD/MINERS sector when the low that we have been expecting & discussing finally comes. I am thinking that it MIGHT have just arrived with that FED minutes report.
I am too busy to draw up a ton of charts so here is the GDX at the 50sma idea that has been repeatedly mentioned.
Yesterdays GDX chart drawn at 10:30 a.m.. This is what I thought may occur.
GDX NOW
This is GDXJ Now , broke down & reversed on FED MINUTES.
Gold also reversed, so this could be the lows. A safe way to play it is to wait for some follow through tomorrow . Why?
Look at that GDX chart….There have been other reversals along the way that failed. I didn’t do an intraday alert for those other reversals , so why this time?
Yesterday I saw a lot of traders & ‘experts’ saying that JDST was the buy, that trend lines have been broken on Miners , and also that you should know better and go short. THAT is a good sign that things are ready to turn. SHorts will have to cover and a small rally will take hold.
Also Timing wise… it is likely that this is the start of the 3rd daily cycle that I have been discussing , because we are in the time frame for it.
REMEMBER: THIS 3rd daily cycle is likely to be weaker than the first two if the se are just part of a bear market rally. Usually only trade-able for around 8 days. I Know that I have experienced traders here that have been waiting to pounce on this one, so without a guarentee that the lows are in ( I really feel they may be though) – how to trade this ??
– Some may wait for further follow through
– Others may wait for the next ICL ( Real trade-able low due later this spring )
– You may just buy your favorite Miners, hoping for a quick trade, with a stop in place below todays lows
– Some will buy calls.
However you play it , just remember that it is the 3rd daily cycle and they tend to give it up within the first 2 weeks.
~ALEX
great advice. Once you feel 3rd dcl has topped would you consider jdst and dust?
I actually am entertaining that idea.
The tricky part is discerning the difference between the bear mkt rally 3rd dcycle, and the what if this is the start of a bull market last November, since many other commodities are rising now too?
But yes, I think the ride in JDST from the top of the 3rd dcycle to the dcl could be very good.
If it is the top we will know pretty quickly as we would finally make a higher high and higher low. I am not getting my hopes up. Seems like gold has a date with triple digits.
Hi Alex
Assuming this is the DCL, would the expectation be for GDX to make a higher high in the 3rd Daily Cycle?
Hi Jay,
Yes, theoretically it should because it found its highest point on day 23 , more than 1/2 way through the cycle. I wouldnt bet the farm on it , though. This run needs to prove itself with more than a little short covering.
Gold is not likely if this is a bear mkt rally.
But if not new highs then still reasonable to see a double top (or pretty near that mark)? You hit miners on the head with the 50 day. But gold went down much, much more than I expected if this was not just another BMR. I don’t think anything can keep it from rolling back over in a few weeks, But we’ll just see what the charts say then.
I see more opportunity on the short side than the long side for myself in regards to gold. If we are still in a bear market and the 3rd daily cycles are weak then I have learned from Alex that we may spend more time in a weak period after this one tops. Then the 4th daily cycle is one that has an even more probability to roll over…. still holding the larger cap oil stocks…thanks Alex….
Ur a good mind reader or read between the lines : ) This is my thinking if we are in a bear mkt rally.
I like to ride the first 2 cycles long , maybe catch a week long on the 3rd, then 2 cycles short . I have to see how it unfolds though.
Just paying attention to you. I am here to do two things. Learn and make money. You provide both!
Alex, I saw an interesting study the other day from McClellan on comparing gold tonnage held in GLD and gold prices. The article showed that GLD bullion assts tend to wax and wane with gold prices. Up trends in gold get people wanting to own GLD of course so the sponsoring firm will issue more shares and use the proceds to buy more bullion to keep the share price close to the net asset value. The sentiment extremes can show up as reflected by the investors from one extreme to the opposite extreme. The point was made that even though the price of GLD has gone south in the last few weeks the tonnage held has not dropped that much. The hunch is when we get to the next important low the tonnage held in GLD will be near the lows again and not near highs like we still are currently. This gives me more reason to believe the 3rd cycle top will be weak and looking for buying in a safer period when you point out to us that we are near the next ICL. I was curious what you think of this idea/comparison?
It has been explained to me in a more basic way,
When the price of GOLD goes up, GLD has to buy gold, when the price falls a good amt, they are forced to sell their holdings. So Do they sell on the next rise?
Does the dog wag the tail or the tail wag the dog? I’m not sure what effect one has on the other.
Thank you for the help. I knew you could shed some light on the subject.