This ETF proxy for gold miners turned weak Monday even though bullion quotes were strong, warning of possible trouble ahead. Stochastic indicators on GDX’s daily chart were also problematic, having generated three price highs since late June that have diverged relative to corresponding overbought peaks. I continue to hold 6th Sep 29/31 calls spreads, but bought 30th August 28 puts today as a hedge. Some subscribers may still have calls, since I explicitly recommended buying them two weeks ago. This was just before GDX took off, enabling anyone who did the trade to easily ‘double out’ or better. Please let me know in the Trading Room where you stand so that I can determine whether to post a tracking position. Regardless, as noted here and in the Trading Room, we are waiting for weakness to re-establish a long position with cheap call options.
GDX – Gold Miners ETF (Last:29.00)