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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
  • GDX: Accelerating Lower 2 comments
    May 27, 2014 12:53 PM | about stocks: GDX

    The first time that the current down-channel in the Market Vectors Daily Gold Miner ETF (NYSEARCA:GDX) was identified was in this earlier post.

    It took several sessions to definitively mark the channel barrier.

    However, with today's action we can see that the channel is now well defined and GDX is accelerating lower.

    The corresponding Direxion Daily Gold Miner Bear 3X ETF (NYSEARCA:DUST) is having an excellent day at a gain of 11.43% as of this post.

    (click to enlarge)GDX Daily Chart

    Chart by TeleChart

    It so happened that the right channel line was also correlated with a Fibonacci time-frame of 34-trading sessions (from contact with the left channel line).

    This gives us a clue that future pivot points in this market may correspond with other Fibonacci time-relationships.

    Disclosure: I am long DUST.

    Stocks: GDX
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Comments (2)
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  • ptTL9
    , contributor
    Comments (312) | Send Message
    I am very tempted to step in and buy some JNUG for a trade; it’s been beaten down and is due for a bounce, nothing ever is going down in straight line. Month end window dressing and beginning of the month inflows should help, IMHO. I know you have a strong opinion how this trade will transpire; appreciate how you continually communicating your analysis and sharing your expertise. Good luck


    I am long DUST.
    27 May 2014, 04:12 PM Reply Like
  • Paul Mosgovoy
    , contributor
    Comments (120) | Send Message
    Author’s reply » Thanks ptTL9,


    I get cautious when I hear that I have an "opinion". :-)


    It is true that the stance that has been taken is bearish on the gold miners..........however, something could happen overnight, tomorrow or next week that might change the character of what is happening.


    In that event, I would naturally want to switch positions (from bear to bull) or at least exit out.


    I certainly think that at some point, going long on gold and the gold-miners will be an excellent position. When market analysis shows that to be the case, my position would naturally switch to go long on the sector.


    Everyone has their own time-frame. JNUG may indeed have a bounce that is a good trade. I can not say that it will or will not.


    However, there is a line in the book about Livermore (Reminiscences of a Stock Operator) that concerns a character called "Turkey"......... If you are familiar with the character, then you know where I am headed.


    Turkey went long on a stock and it promptly rose in value. The person that gave him the tip sold all of his (not based on any kind of indicator....he just sold out) and that person advised Turkey to do the same. Turkey's response was that he would "lose his position" if he sold.


    For me that is where it is at this point......if I attempt to work the up-side, I will need to sell out of DUST and therefore lose my position.


    So, the best that I can do at this point is to stay positioned and continue to look for additional buy signals in DUST.


    If the market makes a reversal.......then I would want to be one of those that recognizes the fact and position accordingly.


    You are correct: Nothing goes in a straight line. My time-frame is on the order of several months...... maybe six to eight months..... which sounds to be longer than what you are trading.


    This is the way of the market. Everyone has their own method.


    I appreciate the input


    Thanks again,


    27 May 2014, 04:36 PM Reply Like
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