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US Dollar Rally Could Spark a Correction in GLD GDX

The EUR/USD reversed right after this scenario was discussed yesterday. Additional confirmation of the bull-trap/false breakout of the bull flag pattern on the daily chart would come on a solid break below the wedge and the 1.12ish support level. Also note that we now have confirmation on the negative divergence that I was looking for, which increases the odds that EUR/USD will soon break down below this 60-minute bearish rising wedge although support is support until broken. As such, we need to see those levels give way in order to confirm the next sell signal in the EUR/USD (which would translate into a rally in the US Dollar).

EUR-USD 60 minute Feb 10th

EUR-USD 60 minute Feb 10th

 

Should the 60-minute bearish rising wedge in the EUR/USD pattern go on to breakdown with a move down towards my pullback target zone, the fake-out (false breakout) scenario discussed in yesterday's video would be in play. Failed breakouts are typically followed by a sharp reversal in the opposite direction, which in this case, would translate to a sharp rally in the US Dollar and most likely a correction in gold & GDX.

EUR-USD daily Feb 10th

EUR-USD daily Feb 10th

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Feb 10, 2016 9:14am|Categories: Uncategorized|Tags: , , , , , |4 Comments

4 Comments

  1. david k February 10, 2016 10:18 am at 10:18 am

    Randy, looks like GDX is headed to the 15.9 area pretty fast. Please let us know.if you plan to unload some or all of your GDX short/ DUST long positions. Thx.

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    • ben711 February 10, 2016 11:00 am at 11:00 am

      I personally unloaded 2/3rds of DUST on the GDX backtest of the downtrend line at 16.20

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  2. rsotc February 10, 2016 10:49 am at 10:49 am

    Ok David. I know there’s a lot of interest in the miners right now so I’ll do my best to communicate my thoughts and any significant developments that I notice, including where I plan to reduce some or all short exposure to the sector. Just a quick heads-up: GDX is currently backtesting the downtrend line of the Sept 2012 high as drawn on my daily/2-day period charts. While I’m currently leaning towards more downside to at least the 15.80ish pullback target that I recent mentioned (38.2% retracement + horizontal support), I did close the Feb puts that I mentioned to you taking on Monday in lieu of DUST as my last scale-in lot for a GDX short proxy. Might re-entry if we get a decent reaction off this downtrend line but using DUST or NUGT short instead of the Feb puts. Premiums too high now plus too much theta burn from here on into expiration next Friday.

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