GDX

This week's sharp rally has turned a dicey short-term picture bullish, generating an ABC pattern that promises to be precisely tradable. Here's how: GDX was a 'counterintuitive' buy on last Friday's pop through the green line, but we can play catch-up with a 'mechanical' bid at 26.92, stop 25.16. Do not attempt this if the stock pulls back to the green line on Thursday or Friday, since that would imply bulls are having digestion pains. However, if GDX pushes above p=28.67 straightaway, we can still raise our 'mechanical' bid to that price, predicated on a pullback to it that takes at least three days._______ UPDATE (Sep 11, 12:12 p.m. EDT): Friday's gap-down plunge hit 26.25, but we passed up an entry at 26.92 because price action did not conform to our timeline. However, my gut feeling is that the trade will work anyway, and that is our rationale for seeking out a 'camouflage' entry opportunity. Zooming down to the three-minute chart (see inset, a fresh picture), that would imply, to begin with, an a-b impulse leg exceeding the labeled peak at 26.65 peak. This is hypothetical, and a different entry set-up could conceivably take shape. But I am proffering this example nonetheless to give you an idea of how a camouflage' entry signal might evolve.

Elsewhere on the page I've raised the prospect of a $55 drop in the price of December Gold. The chart accompanying this tout (see inset) shows what a corresponding drop might look like in GDX, the gold miners ETF.  The picture is visually compelling even though there was no precise bounce from the midpoint pivot at 26.37.  We should infer from this that the selling is strong and that bears will not likely relent until the 24.31 target is reached.  Bulls could nibble speculatively at the 25.34 'secondary pivot' nonetheless, but this is a low-odds trade that warrants a stop-loss no wider than about six cents, assuming a bid at 24.33, just above the pivot. _______ UPDATE (September 1, 12:03 a.m. EDT): GDX touched a low Wednesday of 25.33, but the bounce so far has been too feeble to offer much encouragement. If you got long as advised, stick to the implied stop-loss at 25.27. If it's hit, we should brace for more downside to 24.31, a Hidden Pivot target derived from these coordinates on the 60-minute chart: A=30.76 (8/18); B=26.64 (8/25); and C=28.43._______ UPDATE (September 2, 12:15 a.m.):  The weak opening bar turned out to have been a bull trap, and it stopped us out for a small loss of $6 per round lot. The bounce is bullishly impulsive on the 30-minute chart, but we won't chase it.

GDX is having a difficult time getting past the 31.89 'secondary' resistance of the bullish pattern shown. We've been fixated on its 33.37 target for weeks, and this is starting to take its toll on our patience. However, bears haven't made much headway either, and the ability of this vehicle to hang tough on days when gold futures have been weak is mildly encouraging. On balance, I'll suggest placing a 'mechanical' bid for 400 shares at 30.41, stop 29.42, day order. _______ UPDATE (August 15, 6:59 p.m. EDT): The order went unfilled, but I'll now suggest leaving it in for a couple more days (i.e., until Wednesday's close). _______ UPDATE (August 17, 7:47 p.m.): The stop-loss I'd advised survived yesterday's vicious swoon, so I'm establishing a 400-share tracking position with a 30.41 cost basis. Leave the stop where it is for now. The bounce from the low tripped a theoretical buy signal at 30.56 that is associated with a 33.20 target, but we won't be able to breathe easy until such time as the stock pushes above the red  line, a midpoint Hidden Pivot at 31.43. _______ UPDATE (August 21, 1:15 p.m.):  Gold can't seem to get out of its own way lately, and rallies continue to disappoint. Stick with the stop-loss given above for now, but if it's hit, I may try to re-establish the position on the next promising upswing. It will come, but not necessarily on our schedule. _______ UPDATE (August 22, 10:30 a.m.): This morning's gap-down opening stopped us out of the position for a $396 trading loss, and good riddance!  We'll try again when prospects look better.

Today's ebullient leap put GDX on track for a run-up to the 31.69 target shown -- a 6.4% gain from these levels. A pullback to the green line would make for an enticing 'mechanical' buy, stop 27.43, but if the retracement doesn't come you can use the 'external' peak at 30.05 for a 'camouflage' entry. Consider the target a done deal if buyers torch the secondary pivot at 30.63 in the first hour of the session. ________ UPDATE (August 1, 9:01 p.m. EDT): With today's climb to 31.05, we're almost there! Anyone trading this vehicle?  _______ UPDATE (August 3, 12:36 a.m.): GDX has rallied 15% in the last two weeks, recording a high on Wednesday that fell a nickel shy of my target. Traders who have held long positions for the ride might have taken a partial profit and/or considered covered-writing some just-out-of-the-money calls expiring in about two weeks._______ UPDATE (August 10, 8:20 p.m.):  GDX looks eager for a further  push up to 33.37, a Hidden Pivot resistance that would complete a nearly two-month rally pattern. If there's a pullback to 30.41 first, you can buy there 'mechanically' with a stop-loss at 29.42.

GDX's correction looked like a shoe-in to hit the 26.77 target shown. This Hidden Pivot support will remain viable in theory unless the stock surpasses the 29.02 point 'c' high of the pattern. However, given Tuesday's display of strength in the face of a lackluster day for gold futures, we should give the bull the benefit of the doubt for now.  There is little point in staking out a position ahead of Wednesday's FOMC announcement, since even the most meaningless excuse for 'news' could send this vehicle into conniptions.

The 28.79 target we used to stay on the right side of the move, and to be unhesitatingly bullish for the ride, has been decisively exceeded. Ordinarily this would imply that significant buying power remains, but let's first see how buyers handle the 29.70 target, a Hidden Pivot resistance derived from the second half of the rally pattern used to project 28.79. If they push easily past it, there will be no picture-perfect rally patterns remaining to be culled from the daily chart. One thing would be clear nevertheless: GDX is going even higher, perhaps significantly so, in the days and weeks ahead. _______ UPDATE (9:34 p.m.): So far, so good. Buyers gapped this vehicle higher on the opening bar, pushing the stock decisively above 29.70 to a 30.68 intraday high. If the rally continues, taking out a key peak at 31.35 recorded nearly three years ago, bulls will have the bad guys on the run -- and a shot at 35.64. That target can be found on the weekly chart (see inset), the summit of a somewhat unconventional pattern. _______ UPDATE (July 21, 6:58 p.m.): For now, use these coordinates on the 60-minute chart to gauge the strength of this correction: a=30.05 (7/18); b=27.80; c=?. This pattern would be validated by a print down at x=28.46, but once that occurs the midpoint pivot (p) would become a logical minimum downside target. _______ UPDATE (July 25, 7:51 p.m.): GDX looks like a 90% shot to fall to at least 26.77 before this two-week-old correction has run its course. Here's the relevant pattern on the 60-minute chart: a=30.05 (7/18); b= 27.80 (7/20); c=29.02.

We've been looking to buy GDX on weakness, but it needs to fall a bit farther before it starts looking attractive again. Accordingly, I'll recommend bidding 24.21 for 400 shares, stop 24.11. If you'd rather buy call options, use at-the-moneys expiring July 15. There are some alternative targets for this correction, with a worst-case low at 23.69 that would be a good place to back up the truck, but we'll wait to see how our initial foray plays out before we attempt something else. That last number is a 'D' Hidden Pivot support, but it also lies within pennies of a 'mechanical buy' trigger of a larger pattern. _____ UPDATE (June 22, 8:33 p.m. EDT): Back off for a day or two while the inevitable Brexit psychosis works its magic on global markets. _______ UPDATE (June 28, 2:06 p.m.): On the hourly chart (see inset, a fresh picture), the rally looks like it still has some mileage left, to at least 28.79, in this cycle. The current stall at p2=27.08 appears to be a well-justified consolidation of Friday's gap-up rally. GDX would be a strong mechanical buy, stop 24.23, if it pulls back to p=25.37; otherwise, the trade should be initiated using 'camouflage' near p2 .

The bullish pattern shown (see inset) should be used to target and trade this vehicle for the time being. If the 28.79 target is achieved, it would equate to a 13% rally from current levels. The pullback to p=26.37 has met our criteria for a 'mechanical' buy at that price, and if you did so, a 24.56 stop-loss should be deployed. if it's hit, try again at x=23.65, stop 21.93. Incidentally, a 'counterintuitive' buy signaled Tuesday afternoon could have significantly reduced entry risk. On the 5-minute chart, you can locate the 25.29 entry trigger at 2:50 p.m. EDT. Initial risk, in theory, would have been 13 cents. _______ UPDATE (June 16, 11:17 p.m.):  Bulls are having some trouble getting past the 27.08 'secondary' Hidden Pivot, but it still looks like a good bet to get smashed. You can try getting long 'mechanically' at the green line, stop 21.93, but I'd suggest using a camouflage entry if you attempt it from p=25.37, since the required stop-loss would be large: 24.23.

GDX recouped all of Wednesday's early-morning losses to close up on the day, but not before doing some damage to the daily chart. The 21.94 intraday bottom exceeded an important 'external' low at 22.37 (see inset) recorded on April 25, generating the first bearish impulse leg of daily-chart degree since mid-January. The effect would be compounded if the decline surpasses yet another key low at 21.30 without an intervening upward correction.  If there's a  silver lining, it comes from the downtrend's failure, at least so far, to reach the 21.20 'd' target shown. It is also a tentatively bullish sign that the bounce came almost precisely at the secondary pivot, 21.97.  With such mixed signs, however, we'll back away for now and monitor the lesser charts for evidence that bulls might be regaining their strength. _______ UPDATE (May 26, 5:37 p.m. EDT): GDX became a 'mechanical' short at 23.54, stop 24.27, on the opening bar, with a 21.34 price objective. Use 'camouflage' if you intend to board belatedly, since that would effectively tighten the stop.  _______ UPDATE (May 30, 2:22 p.m. EDT): The relapse that ended the week has made 21.31 (see new chart) a good bet to be reached. Since there is an alternative target at 21.17, bottom-fishing using the 'camouflage' technique is suggested.  ________ UPDATE (June 5, 7:23 p.m.): Friday's wild lunge negated the bearish target at 21.31 and put in play a rally target at 26.81.  On the hourly chart, use these coordinates to find the target and related Hidden Pivot levels: A=12.33 on 4/14; B=26.17 on 5/22. _______ UPDATE (June 8, 9:54 p.m.): Close but no cigar.  Today's gap-up opening brought GDX within 31 cents of the 26.81 target flagged above. The target remains viable, so watch out for a possible last-gasp had-fake. _______ UPDATE (June