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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
  • Gold Market: Bull Or Bear? 2 comments
    Jun 24, 2014 10:45 AM | about stocks: GDX

    Yesterday's 2-Hour chart (below) of the market Vectors Daily Gold Miner ETF (NYSEARCA:GDX) shows a wedge pattern that typically takes place at the end of a move.

    The chart was generated just after the market close.

    (click to enlarge)GDX: 2-Hour

    Chart by TeleChart

    Taking a look at an updated chart (below), we can see that there is a reversal in progress:

    (click to enlarge)GDX 2-Hour

    Chart by TeleChart

    The weekly chart of the GDX shows that price action has contacted and verified the existence of the upper channel (wedge) line.

    (click to enlarge)GDX: Weekly Chart

    Chart by TeleChart

    How the market handles the retracement levels will indicate which force (bull or bear) behind the market is the most dominant.

    As can be seen in the weekly chart above, the GDX is perfectly positioned to retrace higher into a known resistance, or to fall away into a capitulation event with targets in the low 15's.

    Disclosure: The author has no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

    Stocks: GDX
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Comments (2)
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  • Ihavenoclue51
    , contributor
    Comments (9) | Send Message


    Looks like you could be on target with this call. I sold my JNUG position way too soon and couldn't find a good re-entry point. Have been trying to play the pull back for a week now with JDST and hopefully it will now pay off with the bounce of the GDX resistance line. A little surprised that you aren't jumping in too since you've been so bearish.


    24 Jun 2014, 05:27 PM Reply Like
  • Paul Mosgovoy
    , contributor
    Comments (120) | Send Message
    Author’s reply » Thanks John,


    I missed and so did not participate in the up-swing that has just occurred.


    It may be short-covering and in that type of situation, the bids could disappear at any time. So, I stay out......even though it was a spectacular move.


    You are right, I am bearish but I do realize (as has been pointed out to me by others) that the big impulsive move lower in the GDX has already occurred (starting during the week of 9/21/12).


    So, this move lower, if it takes place may be more labored than "Wave 3" if I use Elliott parlance.


    Note that I do not use that theory to base my decisions but I am aware of its tenets.


    It appears that the small caps may offer a better opportunity for a decisive move lower as they too had a vicious reversal today.


    There may be a more aggressive opportunity with TZA than with DUST. Price action will let us know for sure.


    GDX has some potential support levels to get back through before it contacts the lower wedge line.


    In the case of TZA, it is a long way down to get to support. At this time, I prefer that position.


    The objective is to continue to build the account and be on watch to pick up AEM at 19, GOLD at 45 - 50 and GG in the 17 area.


    If the miners head lower into September, then we are setting up for tax loss selling.


    If there is a down-draft, those three may reach that point before December. We will see.


    Thanks again,


    I have thought about your "reverse head and shoulders" question frequently over the past week.


    While I do not think that is what is taking place, I still missed the nuances behind this current move.


    I have reviewed my data and spotted the day I made the error.....noted it and am moving on.


    Thanks again. I appreciate the opportunity to discuss current situations with you.




    24 Jun 2014, 06:09 PM Reply Like
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