Trend Reversal in GLD, GDX & US Dollar Likely

Gold & the precious metal mining stocks are at resistance while overbought on the near-term time frames while the US Dollar looks poised for a bounce. As such, the odds for a pullback or correction in GLD & GDX are quite elevated at this time. This video starts with an overview of the two largest components of the US Dollar Index, the Euro & Yen, both of which indicate that the recent rally in the dollar which has been the primary driving force behind the recent rally in gold, may soon be over. From there, the charts of GLD & GDX on both the intraday & daily time frames are covered.

2017-03-08T21:19:25+00:00Nov 2, 2016 1:40pm|Categories: Forex (Currencies), Gold & Commodities|Tags: , , , , , , , , , |8 Comments


  1. rsotc November 2, 2016 2:29 pm at 2:29 pm

    The breakout of GDX above that 60/120-minute downtrend line/triangle pattern covered has now failed with an impulsive move back down below the downtrend, thereby quite possibly putting the bull-trap/false breakout scenario discussed in the video in play although I’d like to see GLD start to move impulsively lower to help confirm & before adding to the NUGT short that I took earlier today.

    • GetItRiight November 2, 2016 3:29 pm at 3:29 pm

      Randy, I am at work and can’t watch the video. What is GDX target to the downside?

      • rsotc November 2, 2016 3:44 pm at 3:44 pm

        GIR- I discussed the option of both a relatively quick “overbought-into-resistance” pullback trade with the possibility of extending the GDX/NUGT short to a swing trade that could track with GLD heading as low as 115.70 in the coming weeks to months. I didn’t add GDX/NUGT/DUST as official trade ideas nor list specific targets although I did highlight some support levels to watch for on a pullback. As such, I plan to watch the price action in GLD, GDX & the US dollar (+ Yen & Euro) from here to determine whether or not to book quick/shallow profits.

        Potential quick pullback targets for GDX (actual support levels, unadjusted for an optimal fill): 24.55, which is the bottom of the yesterday’s gap (which was just hit with GDX immediately reversing so far), then the uptrend line off the Oct 11th lows (which also catches the Oct 28th lows, 60-min chart, log scaling) & then the 22.65 area with additional target possible but again, depending on how the chart play out from here.

        Today’s reversal off resistance & backfill of yesterday’s gap (with the bottom of the gap being the target), a 5% drop in GDX, was the first logical quick pullback target but I’m holding my position for now.

        • GetItRiight November 2, 2016 3:53 pm at 3:53 pm

          I am holding as well. I have a 23.x GDX target on one of my charts (which I can access from home only). I also think the dollar will continue on its way up, once the traders digest the news, meaning gold and the miners should continue lower.

  2. GetItRiight November 2, 2016 3:18 pm at 3:18 pm

    What a day in the miners. I got in JDST a bit early yesterday with a quarter position. I added a full sized position today towards the lows and once after the FOMC results were published and it was clear the reversal is in place. Thanks @joefriday for confirming my position.

    • rsotc November 2, 2016 3:53 pm at 3:53 pm

      @GetItRiight , I did see your JDST post along with @joefriday ‘s & some others in the trading room that recently shortly the miners. Nice entry & I agree, great analysis by JF as well as yours. I just went back & saw that you posted a chart of GDX with the same triangle pattern trendlines that I covered in the video. Like you, I’m also open to the possibility of a pullback to the bottom of that pattern but still might just take the quick buck & focus on my equity market shorts as it appears that the bottom is about to fall out of the stock market.

  3. rsotc November 2, 2016 4:11 pm at 4:11 pm

    Overhead resistance levels (R1-R3) show with all horizontal & trendlines below as potential support levels with a high probability of GLD continuing to the 123.20 level for a backfill of today’s gap.

  4. joefriday November 2, 2016 8:26 pm at 8:26 pm

    GDX flopped like I thought it would…albeit it extended a bit further than I thought it would as miners/metals often do… break back below $25 signaled low is not in yet..GDX $22-$20 is coming IMHO..


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