For more than a month, we’ve waited patiently to jump back aboard after a fat score with some out-of-the-money calls purchased in August. GDX is trading about where it was before we bought the options, and so it’s probably a good time to hunker down on the lesser charts as we wait for another exceptional opportunity. The chart shown, going back to July, highlights a rather large, beautifully formed head and shoulders pattern that warrants our attention. I am skeptical of this bearish formation because it tends to crop up everywhere you look for it. In this case, however, the H&S is for real, and not just a hallucination. The good news is that, because it will tend to condition the expectations of technically oriented traders, they will be sufficiently bearish to cause the stock to fly if it suddenly aborts the pattern with a steep, sharp move higher. We’ll be ready in any event, cautious but with a bullish speculative bias. _____ UPDATE (Oct 16, 12:36 a.m.): Tuesday’s close beneath p2=26.31 was not exactly a sign of robust health. Whatever the case, it argues for waiting until D=25.22 is reached before we attempt to bottom-fish aggressively. In the meantime, we can scalp off rABC patterns as we attempted to do on Tuesday. Stay tuned to the chat room if you’re interested. _______ UPDATE (4:56 p.m.): GDX ratcheted higher after opening on a wacky bar that held no easy entry opportunities for us. We’ll remain alert. _______ UPDATE (Oct 17, 4:12 p.m.): Other than a post by Catman, there was no apparent interest in GDX in the Trading Room today. For what it’s worth, here’s an rABC pattern with a 27.66 rally target that can be used as a minimum upside objective as the week ends. ______ UPDATE (Oct 21, 7:33 p.m.): Buyers got snuffed on a bull-trap opening but will have another opportunity to rally from the green line at 26.55 on Tuesday. A close below 26.18 would put a 25.25 downside target in play (60-min, A= 29.54 on 9/24), so there’s no rush to buy. _______ UPDATE (Oct 23, 10:25 p.m.): Zzzzzzzzzz. Wake me when the snoozefest ends, presumably with a pop above 27.37. ______ UPDATE (Oct 24, 6:40 p.m.): Finally, a breakout! Buyers are closing on the 27.66 target given above, but a week-ending finish above it would suggest an imminent test of the 28.38 peak recorded on October 8.
GDX – Gold Miners ETF (Last:27.53)