This vehicle has tripped a ‘counterintuitive’ buy signal off the ‘reverse ABC ‘ (rABC) pattern shown. Typically, we look to exit these trades at p (in this case 27.77), but since we are not officially on board, we’ll use the pattern for forecasting, at least for now. If price action should generate a textbook mechanical set-up to get long we’ll take it, although we don’t have much experience using that type of entry in conjunction with reverse ABCs. If GDX is going to the 29.02 target, it should handle the p resistance with ease. _______ UPDATE (Oct 3, 8:54 p.m.): Today’s feint above the red line set-up a ‘mechanical’ buy if the retracement hits x=27.16 (stop 26.50). This is a so-so opportunity (6.0 out of 10.0) because the point ‘B’ high is so ‘sausage-y’. That means if you act on it, don’t bet the farm. _______ UPDATE (Oct 4, 9:16 a.m.): All bets are off, since ambiguous, completely meaningless payroll ‘news’ has caused stocks and futures to go haywire ahead of the opening. ______ UPDATE (Oct 5): Yes, the trade would have worked perfectly, since GDX made a V-shaped bottom at 27.14, two cents below where I’d suggested bidding. Even with hindsight, however, it still would have been a difficult trade, since gold futures swung $18 in moments when the alleged jobs ‘news’ hit the tape. These trades are do-able, but not ideally via updates sent out the night before. I hesitate to put out updates every time stocks feint one way or the other, so you’ll need to stay close to the Trading Room if you want to be apprised in real time. If I’m not in the room when things happen, don’t hesitate to ask others, since there is invariably someone around who knows his Hidden Pivots as well as I do.
GDX – Gold Miners ETF (Last:27.89)
