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Covering GDX Short, Final Target Revised

With potential (but still not confirmed) positive divergences forming on the daily & intraday time frames plus the fact GDX is becoming oversold while approaching the bottom of the June 2nd-3rd gap, I have decided to revise the final target on the GDX short to current levels (23.55). This provides the GDX short trade with profit of 16.4% from the August 24th short entry at 28.16. One could opt to either book full profits or let the position run while trailing stops although the risk of an opening gap bypassing your stop is always a possibility.

GDX 4-hour Oct 4th

GDX 4-hour Oct 4th

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Oct 4, 2016 3:10pm|Categories: Completed Trades - Short, Gold & Commodities|Tags: |9 Comments

9 Comments

  1. Gaucho October 4, 2016 3:19 pm at 3:19 pm

    Hi Randy @rsotc,

    Will the GDX potential positive divergence affect the CDE’s bearish case?

    Regards

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    • rsotc October 4, 2016 3:29 pm at 3:29 pm

      Gaucho- Those divergences could very well continue to develop, become “confirmed” & play out for a fairly decent counter-trend rally, possibly more. They may also fail to become confirmed. CDE is likely to trade largely inline with the rest of the miners,particularly the silver miners & with SIL coming up on my second support zone, the R/R just isn’t very favorable to remain short at this time although I can certainly see some more downside.
      Trailing tight stops at this point are one option that could allow for additional gains but the risk of an opening gap that jumps well above your stop is always a possibility. For now, I just want to book profits on most of my mining shorts & wait for the next objective entry or setup.

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  2. Dazi October 4, 2016 4:34 pm at 4:34 pm

    Excellent, Randy, very much appreciate the update and applaud your calls. And Congrats! to all who had the good sense to take heed.
    [I was not so smart.]

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    • rsotc October 4, 2016 4:40 pm at 4:40 pm

      Thanks Dazi & try not to be too hard on yourself as the last couple of quarters have been one of the most difficult stretches in trading that I’ve seen in years, largely a result of the back & forth, sloppy & erratic price action in the broad market. I’m starting to double-down on my efforts to find some stand out swing trading opps & my guess (based on what I see in the charts) is that the last quarter of 2016 is very likely to be much more conducive to swing trading than the last two quarters. Thanks for your feedback & best of luck on your trades going forward.

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  3. rsotc44 October 4, 2016 11:11 pm at 11:11 pm

    Hi, would you expect gold to possibly make a next leg up to 1500 by the end of the year? There is a lot of speculation that this will be the case on how gold ends 2016 thanks. Bib

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    • rsotc October 5, 2016 12:48 pm at 12:48 pm

      rsotc44- While anything is possible, I just don’t see much in the charts that would indicate that gold will be anywhere near 1500 by or before the end of the year. I’ll continue to monitor the charts & let you know what I see but just remember that it is common to get such big calls on gold or any stock, sector, commodity, etc..after such a bullish run like gold had throughout the first half of the year. As of now, I’m standing aside & waiting patiently for the next clear setup, whether that is long or short, trying to remain as objective & unbiased as possible.

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  4. qlikely October 4, 2016 11:27 pm at 11:27 pm

    Thanks Randy. I also closed this one out right at 3pm. Now I will be looking for an objective re-entry point to get short again in GDX after a bounce. I would welcome any thoughts you might have on the most likely levels were we might see an objective reentry develop?

    With appreciation.

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    • qlikely October 4, 2016 11:28 pm at 11:28 pm

      where

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    • rsotc October 5, 2016 12:52 pm at 12:52 pm

      Congrats on that timely exit yesterday qlikely. I will most certainly share my thoughts the next objective entry on the miners looks to be setting up. After big moves like this, it isn’t uncommon to see some pretty big back & forth swings in GDX, which can be very frustrating if trying to swing trade the miners long or short as your stops are likely to be hit before your swing targets. I might day trade the miners here or there if I see any decent setups on the intraday charts but don’t plan to jump back into a swing trade, long or short, just yet.

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