Gold Miners ETF

The 21.48 peak labeled in the chart should be considered the Matterhorn for bulls. They've been slogging higher in fits and starts for the last two months, but without exceeding a single external peak on the daily chart. That's why 21.48 is so important. If the next rally cycle pushes past it, also exceeding May 14's 'internal' peak at 21.25, that would adrenalize the daily chart by creating a new, bullish impulse leg. An alternative possibility is that GDX is not quite ready for the push and will need to pull back first to 19.16, a Hidden Pivot midpoint (A=21.48 on 2/27) , for a running start. For now, we'll watch and wait. _______ UPDATE: My 19.16 target missed the low of a nice bounce by a single penny. However, because there have been no reports in the chat room of anyone buying down there, I have not established a tracking position.

Yesterday's rebound in this vehicle was strong, although not quite as compelling as the one in Comex Gold futures. Moreover, the intraday low exceeded the midpoint support of the pattern shown by a decisive 52 cents, shortening the odds that its 'D' sibling at 22.25 will eventually be reached. We'll give bulls the benefit of the doubt nonetheless, since mining shares are unlikely to languish if they catch their first whiff of strength in bullion in many months. From a Hidden Pivot perspective, this vehicle needs to keep running without taking a breath until 29.83 (a 5/14 peak) has been exceeded. Camouflageurs should look for entry opportunities on the 15-minute chart, since there are some choice 'externals' to be found therein.  ______ UPDATE (May 23, 12:33 a.m. EDT):  The breath that GDX could not afford to take has in fact been taken, casting at least mild doubt on a bullish outcome.  Worse than drawing a breath, actually, GDX sucker-punched bulls on the opening bar. _______ UPDATE (June 3): Last week's modest rally failed to generate an impulse leg on the daily chart, but it wouldn't take much to achieve this. Specifically, GDX will need to hit a minimum 30.97 this week to get the job done.  If it pulls back from a high thereafter without having surpassed  31.27, camouflageurs should use the retracement to get long.

We should know soon whether the bear market begun from $25 last October is about to descend t0 new multi-year lows below $17.  First, however, GDXJ will have a chance to turn higher from 18.28, the midpoint support of the clear-as-day pattern shown. Bottom-fishing can be attempted there with an 18.35 bid, stop 18.19, but I wouldn't risk any more than that.  If the stop is hit we should infer that the weakness will continue down to at least 17.20, the midpoint pivot's 'D' sibling.

A downside target at 36.42 beckons, although it is by no means ordained. Notice that the first attempt to put this vehicle away failed, resulting in the creation of a higher point 'C' high. That weakens the bearish case, although the weight of the pattern shown is sufficient to tip the argument their way for now. We can try bottom-fishing nonetheless with a 42.44 bid for 400 shares, stop 42.39.  This gambit is based on the 42.42 target of the pattern (on the 15-minute chart) A=47.53,  (Jan 2 at 10:15 a.m. EST); B=43.99 (Jan 8 at 10 a.m); C=45.96. _______ UPDATE (10:55 a.m. EST):  The stock crushed the support on its way to a so-far low of 42.03, making an eventual fall to 36.42 more likely.  Our trading loss on this speculation was minimal -- $20 theoretical plus commissions. You can learn how to do this stuff yourself. No kidding. Click here.

The Gold Miners ETF has been in a trading range for about a week, after making a potentially major low on May 16.  While bouncing up and down, GDX has traced out several attractive patterns, two of which have already rewarded tightly-stopped trades at their midpoints.  Unfortunately these two patterns point in different directions, and we are left to guess where GDX is going next, to its bearish 'D' target at 42.23 or its bullish 'D' at 46.90.  The good news is that hidden pivotry enables bulls to use a bearish pattern by going long at the lower target.  For a trade, we would buy at 42.26 with a stop at 41.99.  For an investment, we would size the purchase appropriately and omit the stop.  (Posted by Doug “harry” McLagan) _______ UPDATE (June 1, 2:15 p.m. EDT):  GDX decided that its destination was 46.90, and it zoomed up to 46.85 during morning trading for a quick 7% gain.  It has hovered just below that level for two hours now.

If the Gold Miners ETF can clear a pair of hidden pivots at 45.69 and 45.78, it should be on its way to a 'D' target of 47.68.  We'll use a print at 45.83 as our benchmark for GDX surpassing the higher of the two pivots.  Anyone shorting the vehicle (and we know it happens, don't we?) should cover if 45.83 is reached.  If our 47.68 target is achieved, GDX will have taken out some important prior highs on the daily chart and will be showing some convincing strength.  (Posted by Doug “harry” McLagan)

The Gold Miners ETF has bounced strongly from last Wednesday's low at 39.08, tracing out an elegant pattern which projects up to 44.97.  Yesterday the rally paused just shy of the pattern's midpoint at 43.20, but a print at 43.25 will give us good odds that the "D" target will be reached.  A move through "D" and above 45.00 would signal more upside to come.  Skeptics have their case, however, as the rally thus far has not erased enough of the recent dramatic decline, which is best viewed on the weekly chart beginning at 57.91.  GDX will need to get above 44.00 before we can safely say that the larger impulse wave is behind us.  (Posted by Doug “harry” McLagan)

Harry's prediction more than  a month ago -- reiterated and amplified in the chat room on Wednesday --  of a tradable low at 46.15  was a near-bullseye, so I'm establishing a tracking position of 400 shares for your further guidance. For now use a 46.18 stop-loss. Please note that there is potential downside to 44.87 if GDX breaks down. _____ UPDATE (2:49 p.m. EDT):  That was quick. We exited on the stop a short while ago. Someone in the chat room asked whether the tight stop might have been a typo.  It wasn't. My intention was to deny GDX the opportunity to play me -- and anyway,"rules is rules."  By now, we should have learned that any trade we do in any vehicle even remotely tied to mining shares should not be based on faith, hope, trust, 'fundamentals', or, heaven forbid, optimism, but on purely mechanical indicators -- with a dollop of cynicism, and another of skepticism, thrown in for good measure.

Gold came down hard for a second straight day yesterday, but for all the wrong reasons. That’s why Rick’s Picks subscribers were ready to seize the opportunity with distress bids in two popular gold mining vehicles. One of them, GDX, the Gold Miners ETF, fell to within 14 cents of a 46.15 target that had been disseminated to subscribers a month ago when the price was in the high $50s.  So far, the recommendation is looking like a winner: by day’s end, with GDX settled at 46.71, the paper position was 68 cents in-the-black. The other recommendation involved GDXJ, an ETF comprised of smaller mining companies. This vehicle plummeted yesterday to a 22.74 target that had been promoted to our subscribers as a “back-up-the-truck” number when the stock was trading closer to $25. And although GDXJ fell yesterday a bit lower than we’d forecast, hitting 22.39 intraday, the bounce into day’s end brought it back to a high of 22.85 and a settlement just two cents below that.  Give it a little rest overnight, and we expect GDXJ to bolt from the gate on Thursday, the last trading day of this holiday-shortened week. Even so, we’ve instructed traders to place protective stops not far below where they got long in order to minimize exposure if GDX and GDXJ relapse to new lows. [Want to get in on our next trade via a real-time e-mail alert? Click here for a free trial subscription to Rick’s Picks that will give you that and much more, including access to our 24/7 chat rooms.] So what about our assertion that bullion and mining shares fell for all of the wrong reasons? The selloff began on Tuesday when minutes from the last Fed meeting were released. Apparently, the minutes contained no explicit word that the