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GDX NUGT Trade Update

After hitting the first two targets & reversing shy of the final target, GDX is current poised to gap just below the suggested stop of a 60-min close above 26.10. With resistance overhead in both GDX & GLD, this one is going to be close but I do not plan to modify the stops. GLD is currently indicated to gap up to just below the 120.33 resistance level + the 61.8% Fib retracement, where I expect a reversal. Again, the suggested stop for GDX remains any 60-minute candlestick close above 26.10.

As of yesterday's close, GLD has only retraced about 40% of the move down off the recent highs yet GDX had retraced about 80% of its comparable correction. Does GDX know something the gold market doesn't know or are the miners getting ahead of themselves?

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Jun 8, 2016 9:25am|Categories: Completed Trades - Short, Gold & Commodities|Tags: , |5 Comments

5 Comments

  1. pangblood June 8, 2016 9:44 am at 9:44 am

    @rsotc

    I think a while back someone posted along term chart of GDX/GLD ratio in the trading room (kudos and thanks to that person), and that chart showed that GDX has fallen much more than GLD over the past few years. I think that may be the underlying reason GDX is flying, junk companies no longer viewed as junk

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  2. Ruben June 8, 2016 9:50 am at 9:50 am

    Randy,
    GDX has created two gaps within the last 5 trading days. Even though they are brake out. Do you think that these gaps have to eventually cover?
    Thank you

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    • rsotc June 8, 2016 10:15 am at 10:15 am

      Although many gaps are backfilled, not of them are so I won’t say that those gaps will MUST to be backfilled but I will say that I think that they will. Despite the explosive move in GDX on Friday & again (so far) today, I’m still leaning towards more downside & quite possibly, a complete erasing of Friday’s massive rally in the miners.
      First things first, of course. Let’s see if my call for a reversal on GLD off that 61.8% Fib pans out. So far, GLD stopped right there & has reversed. I’d now like to see it fall below the 120.30ish support/resistance level & then backfill today’s gap. If that happens, the miners will most likely follow suit & at the very least, backfill today’s gap. We’ll just have to take it one step, or support level, at a time from there.

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  3. rsotc June 8, 2016 10:33 am at 10:33 am

    pangblood – Yes, the fact that gold prices have recovered is a stick-save for many of mining companies that were in a precarious fundamental position, no different from the way that many of the energy stocks that were facing potential bankruptcy recently have received a stay of execution as crude prices have rallied over 60% since the Feb lows. Also add to that the fact that I’ve always said that the gold stocks, in the purest form, are essentially a leveraged play on gold prices.
    FYI- GDX managed to stay above 26.10 throughout the first hour of trading today so it is officially stopped out although I’m still betting on a failure of GLD at that 61.8% Fib & a likely backfill of today’s gap on both GLD & GDX.

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  4. GetItRiight June 8, 2016 11:10 am at 11:10 am

    I got in DUST at 9.75, with a stop below today’s lows, at 9.30.

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