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Paul Mosgovoy
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Truth is timeless: “Markets never change” – Jesse Livermore, 1923 The early masters, Livermore, Wyckoff and Loeb isolated themselves from the crowd and crowd thinking. None of them ever graduated high-school and yet they each became legends in the market. Their techniques have been time-tested.... More
  • Market Summary: DUST, GDX 2 comments
    Apr 9, 2014 5:48 PM | about stocks: DUST, GDX, GLD

    Today's Fed news may have been used as the final catalyst to trap the bulls.

    This may be the start of the move to new lows that was discussed in this link by David A. Hunter and posted on Casey Research.

    Obviously, gold price going to $1,000/oz. or lower is not a popular view with so many so heavily committed to silver, gold and the related equities.

    Let's look at what the chart has to say:

    We are using the Market Vectors Gold Miners ETF (NYSEARCA:GDX) as a proxy for the Direxion Daily Gold Miners Bear 3X Shares ETF (NYSEARCA:DUST).

    This update is going to look at GDX a little differently. The daily chart of GDX below is up-side down.

    (click to enlarge)GDX Daily Inverted

    Chart by TeleChart

    It can clearly be seen that if GDX is turned upside down, price action has come back down (up) to test the support area as shown.

    The reality is that if GDX rises (on the inverted chart) from here, then the down-trend is continuing.

    In addition, since we have empirical data that indicates a high level of commitment and fervor amongst the bulls (and a GLD forecast to the 900-area), the potential for a continued down move into a capitulation is a possibility.

    For the moment, our plan is to continue to take the short-term indications to go short the GDX (long the DUST) and exit when there is a break of the trend-line or contact with the upper channel line.

    Disclosure: I am long DUST.

    Stocks: DUST, GDX, GLD
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Comments (2)
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  • SpikerLexus
    , contributor
    Comments (7) | Send Message
     
    $DUST, If the gold rally had been strong yesterday, the gold price would have moved higher and volume would have been higher during the rally. The risk ratio chart would have been risk on also and none of those things happened. Gold bulls need to be very careful here.
    10 Apr 2014, 07:00 PM Reply Like
  • Paul Mosgovoy
    , contributor
    Comments (120) | Send Message
     
    Author’s reply » Volume has been declining as GDX rallied up into resistance.

     

    Volume is not always a perfect indicator. However, it did show that traders were backing away as price went higher.

     

    Today was a down day and volume increased.

     

    Probability points to lower prices ahead.....and how low is the unknown.

     

    It seems that the market will always push the extreme. So, where is the extreme on the down-side?........ at $15-GDX? We will see.

     

    Thanks for the comment.
    10 Apr 2014, 07:40 PM Reply Like
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