GDXJ has broken down after triggering a less-than-stellar 'mechanical' buy signal a few weeks ago at x=112.02 (the green line). Even so, a smaller pattern that began with the 131.36 high recorded on May 6 implies that bulls will have a chance to regain the upper hand when the descent reaches the 98.21 'D' target of the pattern. This 'hidden support' looks good enough to attempt bottom-fishing there with a stop-loss as tight as 20 cents. Using a reverse-pattern of small degree (aka 'camouflage') is the preferred way to get onboard, but however you do it, expect a tradeable reversal to occur at or very near D.
The week finished with a strong kick, but it was probably a fake. That's because the A-B leg of the pattern in which the rally occurred wasn't even impulsive, at least not on the daily chart. Notice how the point B high failed to surpass the 142.40 peak recorded in March. I expect the rally to fail at the red line, a Hidden Pivot at 124.75, and the subsequent relapse to hit 97.03 before this casualty of Hormuz resumes its long-term bull market.
Before Friday's kamikaze dive, GDXJ looked like no worse than an even bet to reach the d target at 139.45. Now, however, even though we should plan to attempt bottom-fishing at the green line (x=112.02), we should expect no better than a one-level bounce to p=121.17. This is similar to the outlook I've detailed in the current Silver tout (see above), although it doesn't preclude the possibility of both vehicles eventually reaching their respective d targets. For now, use 112.02 as a minimum downside objective for the near term. Keep in mind that it is neither a target nor a 'hidden' support. ______ UPDATE (May 19, 10:44 p.m.): The trade has triggered. See my 22.41 post in the chat room for details. _______ UPDATE (May 22): No change. The trade ended the week about 30 cents in the red.
Although mid-April's high narrowly missed the 'd' target at 139.46, a pullback to the green line (112.02) should still be regarded as an opportunity to bottom-fish 'mechanically'. The odds thereafter would favor a one-level move to p=121.17, although not necessarily a finishing stroke that finally achieves d. As implied above, a pullback to the green line (x=112.03) should be used to get long, much as I have suggested in July Silver. A 'camo' trigger is obligatory, since the entry risk with a stop below 'c' would exceed $900 per round lot. _______ UPDATE (May 8): GDXJ took a powerful leap this week. Unfortunately, it came off a low at 112.80 that missed our bid by a couple of inches. _______ UPDATE (May 8): A shallow dip to start the week came even closer to triggering the 'mechanical' bid I'd suggested at 12.02 (see above), but we still missed getting aboard by 78 cents. That didn't change the still-good odds that the 139.46 target eventually will be reached.
We caught a favorable breeze after getting long last week at 121.17, the midpoint Hidden Pivot of the bullish reverse pattern shown. We seldom initiate 'mechanical' trades at the red line, but in doing so this time, we may have jumped the gun. The position feels a little precarious, so I'll suggest taking a profit on half when this symbol starts trading on Monday morning. Assuming GDXJ opens above our acquisition price, you should set a break-even stop-loss for the rest. Odds are still in our favor, given the easy move through p on the way up, and also the fact that it has racked up four consecutive weekly closes above p since the red line was first touched. ______ UPDATE (Apr 27, 10:44): Exiting half of our long position at 122.86 on the opening yields a cost basis of 119.47 for what remains. Tie it to a 121.05 stop-loss for the time being.
GDXJ popped last week to within an inch of a longstanding target at 133.49, and although it did not quite reach it, price action was sufficiently robust to imply that a new, more ambitious target at 139.49 is now likely to be achieved. It is derived from a lower point 'a' within a larger structure that allows running room to as high as 150.33. First things first, however, so we'll keep our focus on the pattern shown for trading purposes. I don't often recommend 'mechanical' buying at the red line, here 121.17, but in this case it looks worth a try. A 115.07 atop-loss would apply. _______ UPDATE (Apr 17): Bulls achieved solid gains last week, although without dipping to our niggardly bid at 121.17. The forecast provided above remains viable.
Two strong rallies last week improved the look of the daily chart, with a 133.49 target that now looks all but certain to be achieved. Thursday's rigged plunge to an intraday low at 116.13 was quickly recouped, as we might have expected in a healthy bull market. It triggered a 'mechanical' buy at the red line, which confirms the bullish outlook for this ETF, a proxy for the shares of gold exploration companies. If GDXJ were to relapse to the green line (x=110.53), be ready with a bid there and a 102.87 stop-loss.
Like Gold futures, this ETF proxy for junior miners spent the week in timid remission. Although it triggered a theoretical 'buy' signal on Monday, the follow-through failed to reach the midpoint Hidden Pivot resistance after four days of flailing. That could chain in a trice, however, presumably with a jump-start from May Silver, which looked ready to rumble when the week ended. As always, a strong push through p would clear a path to the 133.49 'd' target of the pattern shown.
GDXJ has lost a third of its value in just three weeks, exacting a brutal toll on mining-share investors that will test their faith to the utmost. It would take a rally of at least 7.65 points from any low to trigger a buy signal on the hourly chart (a= 126.88 on 2/17). Using the 102.88 low from Friday would imply a print at 110.53 is necessary to jump-start bulls. Thereupon, GDXJ would be presumed bound for at least p=118.19, or to 133.49 under the most bullish circumstances. This is similar to the best-case scenario I've detailed in my touts for Comex Gold and Silver, but it is hardly a good bet.
The short-term bearish picture for this symbol is congruent with my outlook for Comex gold and silver. Since trading is all about avoiding bumping heads with a thousand clowns, we should wait until GDXJ stops them out with an inevitable dip beneath the twin lows from early February pennies beneath 121. On the daily chart, the trigger interval for getting long thereafter would be 3.65 points, but we can probably cut that by 90% by pulling a trigger pattern from the lesser intraday charts.
