The pattern shown may not be pretty, but it is textbook-perfect for bottom-fishing. I hesitated to spotlight so promising a Hidden Pivot, since doing so is likely to impact its usefulness, but here it is anyway. The 32.05 low from October 10 could interfere, but possibly in a good way, since GDXJ would have to break down below it to actually set up a reverse=pattern buy. I will not mention this further in the chat room, nor even provide the target in this tout, but you can see for yourself where it lies, and you can use it to get long with risk very tightly managed. A trigger interval of 21 cents looks about right for the job.
GDXJ has settled into a tiresome dirge comparable to gold's and looks vulnerable to a further fall to as low as D=31.62. First it will need to test the midpoint support at 33.44, which, because it closely coincides with some lows recorded in January, will take discernment to leverage. My suggestion is to use a 37-cent trigger interval to set up a 'buy' with equal potential. As always, a decisive penetration of p=33.44 would portend more slippage to p2=32.53, at least.
GDXJ spent the week in an unpersuasive bounce from a voodoo number touched the previous week. An outside day on Wednesday that closed near the intraday low added to a mildly troubling picture, one that portends minimum downside over the near term to at least p=33.35 (see inset chart). Any slippage beneath that Hidden Pivot would of course open a path down to as low as 31.52. If we do any bottom-fishing, it should be at either p or p2=32.44.
This mudder was a hair shy of triggering a conventional 'buy' signal at the green line when last week ended. My gut feeling is that the signal will ultimately produce a profit with a move at least to the red line. Why should Mr Market be so kind to us? Don't count on it. More likely is that although the futures will indeed reach the red line, this will occur on a gap through x=33.94 that leaves our bid choking on dust. Even so, we can always try to get aboard by outsmarting the s.o.b. _______ UPDATE (Jan 22, 11:12 p.m.): A gratuitous new low has brought the green line down to 33.92 and the red one to 34.53.
After triggering a conventional 'buy' signal at the end of 2022, this vehicle has gone nowhere as it continues to toy with the green line. If this were a Warner Brothers cartoon, Daffy Duck would stick a bottle rocket up GDXJ's posterior to get things going. Perhaps if we visualize this, something will happen. In the meantime, we'll have to accept the fact that GDXJ is bound to move less energetically than gold futures because, no matter how high bullion contracts go, someone will still have to labor mightily to dig gold out of the ground.
Although GDXJ has not reached the 41.81 rally target we've been using, I've switched to a moderately negative picture because of the way bulls got sandbagged last week after slightly exceeding a key 'external' peak at 39.70 recorded on July 18. My expectation is for the pullback down to at least p=35.20, but I'll be looking closely for the first sign of an upturn from above that 'hidden' support (which will be tradable via a 'reverse pattern'). Let's wait and see first whether the downtrend actually trips a theoretical sell signal by falling to the green line, a feat missed on Friday by just 12 cents. _______ UPDATE (Jan 5): Price action has been viciously abusive of bulls, even if swing highs and lows have been more or less predictable. The low of last week's selloff, for instance, came down to within 18 cents of the 35.20 target flagged above, but without generating any appealing bottom-fishing opportunities. We'll back away for now, since GDXJ is going to need more help from bullion futures to get rolling.
Bulls did what we asked of them last week, exceeding July's 39.70 peak on a squeeze-powered rally that ended the week. They had given up a lot of ground by day's end, but that won't diminish the authority of the impulse leg the rally created on the daily chart, and neither will the fact that the prior peak was exceeded by just 12 cents. It's all good, as they say, and we can therefore expect this vehicle to continue up to a minimum 41.81. In the meantime, any one-level pullback from 40.09 or higher would set up an opportune 'mechanical' buy, even at the red line (where a 37.22 stop-loss would obtain).
Although touts for bullion vehicles listed just above are bullish, GDXJ's weekly chart gives us reason for caution. Notice how the recent high at 39.47 failed to surpass the 'external' peak at 39.70 recorded in July. This display of timidity, which narrowly failed to generate a fresh impulse leg, is not necessarily the kiss of death, but neither is it very encouraging. It would be remedied by a robust blast above 39.47 this week, but until such time as that happens, I'll keep the yellow flag unfurled. Am unqualified success would portend more upside to 41.81.
The 42.09 rally target we've been using looks no less likely to be achieved, notwithstanding last week's punitive selloff from the pink line (p2=39.18). That won't make the prospect of a 'mechanical' buy any less intimidating, however. The first opportunity, which I am not recommending, would be to buy at the red line with a 34.34 stop-loss. It was touched and slightly exceeded on Friday, but we'll wait for a less risky opportunity at x=33.37. Even then, we'll need to create a 'camouflage' trigger to avoid exposing ourselves to nearly $3 of entry risk per share.
The 42.09 target shown has been with us for a while but only came into focus on Friday with the clean move through, and close above, p2=39.18, the 'secondary pivot'. Since GDXJ shredded p=36.28 as well barely a week ago, the implied finishing stroke to D would seem almost as certain as that the sun will rise in the East tomorrow. The rally has been unkind to doubters and will not become any less so as it traverses the white void just above. Prompt me in the chat room if you've got an idea of your own that you'd like vetted, but it will take diligent attention to the lesser charts in any case to get aboard belatedly.
