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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: Rejecting The Bull Case 4 comments
    Jun 2, 2014 1:14 PM | about stocks: GDX

    This morning's action in the Market Vectors Daily Gold Miner ETF (NYSEARCA:GDX) has essentially rejected the bull case for higher prices.

    A marginal new daily high was made within the first hour or so of trading before that move was retraced.

    Taking a look at the Direxion Daily Gold Miners Bear 3X ETF (NYSEARCA:DUST) we can see yet another potential acceleration of the trend higher.

    This time we have moved away from a 1,300%/yearly to an even more aggressive 25,000%/yearly.

    This new change in acceleration will not be fully confirmed until DUST makes a new daily high (and does not break the trend in the process). However, the probabilities are favoring such a move.

    (click to enlarge)DUST Daily

    Chart by TeleChart

    How long does it take to achieve a 100% gain on a trend that is rising at 25,000%/year Answer: A Fibonacci 34 days.

    Obviously, this is not a prediction and everyone reading these updates is responsible for their own accounts.

    What is being shown here is a succession of examples on how the bulls get trapped and the bears get shaken out.

    Each successive day builds the case for a downward move of significance (a politically correct version of "wipe-out") in gold and the gold miners.

    Any break of the trend-lines shown would start to move the case for GDX to the bull side. For now, the trend remains down.

    Disclosure: I am long DUST.

    Stocks: GDX
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Comments (4)
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  • retpdguy
    , contributor
    Comments (206) | Send Message
    Paul do have an explanation on AUY's divergence.
    2 Jun 2014, 09:29 PM Reply Like
  • Paul Mosgovoy
    , contributor
    Comments (120) | Send Message
    Author’s reply » Good morning,


    I can see that AUY looks like it has reached a low around the 7.00 area and has bounced.


    It is now getting back into a previous congestion area........ how it behaves in this region may give clues as to if it has reached a bottom or is just retracing and setting up for a continued move lower.


    The measured move target on AUY (from the 10 - 12 month long wedge pattern that it formed) remains below the 6.00 area.


    There is nothing that says AUY can not come all the way up to test the break that took place around 8.50.


    However, this area took nearly one-year to form. There has to be some kind of significant demand (a continuous, sustained demand, or change in sentiment) for AUY to break through that kind of resistance.


    My premise is that for whatever reason, the professionals are moving the gold market lower. The reason they are doing this (which we don't know right now) will come out later, after the fact.


    Of course, this idea may prove to be incorrect and the position in DUST may be stopped out...... no problem with that. The trade is already well in the green and any exit from here would result in a significant gain.


    All of the stocks that make up the GDX will most likely have counter-trend moves along the way.


    AUY has been going straight down for over two is not unreasonable to think that it would retrace just a little.


    Thank you for your question.......will be watching AUY closely.




    3 Jun 2014, 07:31 AM Reply Like
  • Gold Dog
    , contributor
    Comments (235) | Send Message
    thanks Paul for the great write up on DUST.
    It sure is a wild scary one to invest in, but it gives such huge possible gains....and loses
    4 Jun 2014, 03:26 AM Reply Like
  • Paul Mosgovoy
    , contributor
    Comments (120) | Send Message
    Author’s reply » Thank you Gold Dog, appreciate the input.


    Yes, there may indeed be huge gains available.


    If this market is attempting to throw off (or trap) as many participants as possible, then the resulting move may be significant indeed.


    4 Jun 2014, 07:28 AM Reply Like
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