This vehicle served up a profitable dollop of dreck on Friday's opening bar, triggering a reverse-pattern entry at 34.14 that was spelled out in my tout. Making actual money on the trade would have been fairly easy, since GDXJ pulled back to the green line where the trade triggered after busting through it in the first minutes of the session. The surge got past p2=34.69, implying you could have been out of 3/4 of the position before the rally succumbed to gravity. The plunge was so relentless and dispiriting that we can only infer that still lower prices impend. A hidden Pivot support at 33.79 is the closest target. Since it is but an inch beneath last week's low, we might expect a tradeable reaction with a 'counterintuitive' (i.e., rABC) trigger interval of 0.23. The pattern yielding the 33.79 target starts on the 30-minute chart with A=34.80 on 9/6 at 10:00 a.m.
Although the futures finished the week with no net gain, price action was encouraging relative to the 38.28 rally target flagged here last week. The pattern could be setting up for an enticing 'mechanical' buy at the green line (x=34.30), but we'll need to be alert to other opportunities if the pullback doesn't go that far. I'll mention an even higher target at 38.73 if the one given above is penetrated decisively, especially the first time it's hit. It is derived from sliding the point A low of the reverse pattern down to June 29's 33.95 bottom. ______ UPDATE (Sep 6, 6:51 p.m.): This one is for advanced Pivoteers only, since GDXJ looks like hell. To bottom-fish, use a reverse-pattern trigger on the hourly chart, where a=35.71 on 8/31.
The daily chart yields a mixed picture, the same as the one in COMEX gold. My bias is slightly more bullish for the ETF, though, since the moderate rally that began the week exceeded an 'external' peak that was absent from bullion's graph. This created a bullish impulse leg with potential to lift this vehicle as high 38.28 within the next 2–3 weeks. Friday's pullback to the green line (x=34.30) generated a weak 'mechanical' buying signal, but we'll ignore it until we've seen a few more daily price bars. ______ UPDATE (Aug 28, 6:29 p.m.): Today's robust rally closed just a micron above p=35.63, a compelling Hidden Pivot midpoint, but that's sufficient to tip the short-term outlook bullish. A sharp stab higher or a close above p for a second straight day would make more upside to D=38.28 a strong bet.
I've drawn a bullish reverse pattern, but only to highlight a target failure that is bearish. GDXJ's decline since mid-July's peak at 39.70 'should have' turned from the pattern's 'D' target at 34.70. It did, but so feebly that a trader would need to have been nimble to extract even a small profit. The subsequent relapse took this symbol to marginal new lows, where buyers and sellers spent most of the week mucking around. This is sloppy price action, and although I am not going to write off the possibility of a resolution to the upside, my expectation is for lower prices in the weeks ahead. ______ UPDATE (Aug 16, 7:38 p.m.): This glue horse and its sleazy handlers have eyes for the 32.25 low recorded in March, and they will not rest until stop-losses below it have been triggered like land mines on the Ukrainian front. That price, by the way, is a major point 'C' low associated with a 45.56 rally target that was missed by $1.50 in April.
Will GDXJ's dip last week beneath the green line (x=35.58) generate another profitable 'mechanical' trade? This has already happened twice if you count the May 25 low at 38.79 that missed touching the green line by a relative smidgen. For purposes of bottom-fishing, however, we needn't risk much, even if this vehicle is destined to fall beneath C=32.25 of the big, bullish pattern that promised to deliver 45.56 since March. It is a promise that we should no longer take too seriously, given this symbol's punk performance since early April.
GDXJ is close to triggering its second 'mechanical' buy signal since mid-June. We usually jump on first signals only, but in this case bears look so enfeebled that it may be possible to make money on some call options. Bid the 4 August 37 calls gently, paying no more than 0.32 for them. (They closed on Friday ay 0.49.) This is a day order to be placed ahead of Monday's opening. I will adjust the price intraday if it appears that we can do even better, so stay tuned to the chat room and have your 'Notifications' switch on if you are keen to play. ______ UPDATE (Aug 3, 7:19 a.m.): The bid failed to trigger when the Aug 37 calls opened at 0.53 and instantly traded up to 0.72. Sellers at 0.53 may have felt like they'd been had because they were. Opening-rotation trades in option markets are not for amateurs.
The rally begun a month ago finally achieved the red line (p=38.90), which was about as far as I thought it might go after signaling a 'mechanical' buy at x=35.38. My hunch is that GDXJ will pussyfoot between the red and green lines for longer than we have patience. We'll give it the benefit of the doubt nonetheless, using p2=42.23 as a minimum upside target. Prompt me in the chat room and I may be able to provide timely trading guidance.
GDXJ has done much to earn our distrust since collapsing from a high in April that fell less than $2 shy of a 45.56 target that had looked like a lock-up. It is currently on a 'mechanical' buy signal triggered on June 21, when the downtrend plowed through the green line (x=35.59). I broke with my discipline, passing up the trade, but I won't make that mistake again if the little s.o.b. gives us a low-risk entry opportunity. I still doubt the 45.56 target will be reached any time soon, but that shouldn't scare us away.
GDXJ would give gold-stock bulls reason for optimism if it can pop above the 'external' peak at 37.68 recorded on June 16. However, it is more realistic to expect additional slippage toward the 32.25 low that has shaped the pattern shown. A breach thereof would create a buying opportunity, even if it were merely to take advantage of a likely fake-out rally that doesn't get very far. Please note that GDXJ is still on a 'mechanical' buy signal from June 20 that we passed up.
If pigs could fly, this sorry old sow would still be trailing its hind quarters in the mud. What a disappointment it has been! Even so, and much as I'd enjoy trash-talking a favorite gold-miner proxy, it is actually on a 'mechanical' buy signal that triggered when it touched the green line (x= 35.58) on June 21. Ordinarily, that would give rise to expectations of a rally to D=45.56. In this case, however, assuming GDXJ can come out of its death spiral from a low exceeding C=32.25, I would lower my expectations to p=38.91 -- a mere one-level ride -- for trading purposes. Set an alert at 37.68 for now, since that is where a rally would generate an impulse leg on the daily chart, There are ways to get long before then, but you'll need to nudge me in the chat room if you want to discuss them.
