Expect this dive to reach a minimum 45.95, the midpoint Hidden Pivot support of a pattern projecting to as low as 40.93. If there is no respite from sellers at 45.95, the next stop would be 45.16, the 'd' target of a reverse pattern similar to the one proffered in March Gold. The decisive breach of any clear Hidden Pivot will always imply the next is likely to be achieved, but more bearish still is a two-day close beneath a Hidden Pivot.
With its 'locked' point 'a' low, the pattern shown looks reliable for our purposes, whether trading or forecasting. It is not a healthy sign that the rally off the 44.76 low recorded on November 14 failed on the first attempt to reach the red line, a midpoint Hidden Pivot at 49.17. Bulls could still pull it off, but if GDXJ dips below C=44.76, negating the pattern, that would be more than a mild discouragement. The weakness so far is especially dispiriting because of the power of the impulse leg that took GDXJ quickly from 46.71 to 55.58, a 20% move, in mid-October. _______ UPDATE (Dec 9, 9:17 a.m. EST): This morning's gap through p=49.17 has guaranteed that the rally will reach D=53.58, at least. Be prepared for a stall there.
Last week's prediction missed the turn, even if expectations for physical gold were more bullish. The week began with a manic leap past x=46.97, which made more upside to at least p=49.17 an odds-on bet. Don't expect an easy move through this midpoint Hidden Pivot resistance, though, since both the pattern and the location of p will make it hard as rock. It will take a two-day close above p, or an intraday move surpassing it by perhaps 50 cents, to ensure further progress toward p2=51.38, or even d=53.58. If and when p has been decisively exceeded, a swoon to x=46.97, however unlikely, would be a back-up-the-truck spot to get long 'mechanically'.
GDXJ likely has further to fall, since it has been routinely exceeding the d targets of minor ABC patterns. It will have a chance to turn from 42.52, the midpoint Hidden Pivot support, on the weekly chart, of a=51.92 (4-22-22). That will be an opportune spot to attempt bottom-fishing, although the precisely coincident low at 42.51 recorded in early September will make the trade tricky to execute. If it gets stopped out, expect more slippage to 37.18, where you can back up the truck and load it. That is the green line of the big pattern shown in the chart, and it is as pretty a place for 'mechanical' buying as you will find.
The 46.71 pivot that served as my worst-case correction target now looks likely to be achieved, since this vehicle had little difficulty taking out a related Hidden Pivot support at 48.93. Earlier, I'd suggested bottom-fishing there, and although the trade still looks enticing, it won't be a piece of cake, since the pivot coincides precisely with a low recorded on October 9 that is likely to attract a crowd. Accordingly I'll suggest using a trigger interval of 73 cents to get long off whatever low occurs. You can reduce that to 8 cents if you took the Advanced Tactics course and know how to calculate the voodoo number at 47.19 and know how the trade works.
Last week's wrenching slippage brought GDXJ down to within 18 cents of the 50.55 'd' target of a reverse pattern on the daily chart that was displayed here previously. I've graduated to a bigger bearish pattern that targets 46.71, but the breach on Thursday of that pattern's 51.15 midpoint Hidden Pivot implies the correction will come down to at least p2=48.93. It could fall a further 2.22 to d=46.71, as noted above, if the 'secondary' support (i.e. 48.93) gives way easily. You can bottom-fish either Hidden Pivot with as tight a trigger interval as you can identify on charts of 5-minute degree or less.
Like gold futures, GDXJ has breached the midpoint support of a reverse pattern of daily-chart degree. This implies it has farther to fall, presumably to at least p2=51.81, but possibly to d=50.55. Since it could find traction in either place, tightly stopped bottom-fishing is advised, especially if you trade this vehicle actively. Alternatively, a rally to x=54.32 would trigger a 'mechanical' signal to get short. It would be more appealing than the one I mentioned in the futures, but the trade should be tied to a tight stop.
With last week's surge, bulls left a daunting midpoint resistance in the dust, putting GDXJ on track for a move to at least p2=60.62, and thence to D=72.73, a potential bull-market top. Between here and p2 lie a couple of prior peaks that could slow the ascent, and a voodoo number that capped Friday's exuberance. The weekly chart suggests that a retracement of 2.59 points would provide a low-risk opportunity to augment long positions with risk tightly controlled.
Four rising peaks on the weekly chart since April have created a wedge that will likely need more correcting before GDXJ can take out the 51.74 high recorded on 9/27. Use the Hidden Pivot midpoint support at 45.03 shown in the chart as a minimum objective for this pullback. You can buy aggressively there with a tightlystopped 'reverse trigger' if the opportunity arises, since the support is well located. A bigger picture projects as high as 72.23. The rally has stalled at p=49.02, but a monthly close above this 'hidden' resistance would be encouraging.
The reverse pattern shown looks like it will be useful for our purposes, most immediately tightly stopped bottom-fishing at the 47.31 midpoint Hidden Pivot support. If there were a pop through c=51.74 instead without first dipping to p, that would be quite bullish. However, more backing and filling will probably be needed before GDXJ is off and running again. As always, a decisive penetration of a 'hidden' support would imply the likelihood of further slippage to the next. That would be the secondary pivot at 45.09. Maximum downside over the next several weeks would be to the d target at 42.87. _______ UPDATE (Oct 8, 12:15 p.m. EDT): The downside penetration of p=47.31 this morning is decisive enough to imply more weakness to at least p2=45.09.
