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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
  • Gold: GDX May Test The March Highs 2 comments
    Jul 7, 2014 3:59 PM | about stocks: GDX

    Taking a look at the Market Vectors Daily Gold Miner ETF (NYSEARCA:GDX) below, we see a rising wedge and a potential to test the March '14 highs.

    (click to enlarge)GDX Daily Chart

    Chart by StockCharts

    It is difficult to determine from the chart whether or not price action is going to move lower first or just power on higher.

    If one is long on GDX, then the easiest money may already be over. If short on GDX or long the Direxion Daily Gold Miner Bear 3X ETF (NYSEARCA:DUST), then tight stops are in order.

    As indicated in this morning's release, the more probable trade at this point in time is being short the iShares Russell 2000 ETF (NYSEARCA:IWM) and to leave the gold market alone (or move stops up on long positions) until there is more definition.

    However, that is just a personal preference. Everyone is responsible for their own accounts.

    Disclosure: The author is long TZA.

    Stocks: GDX
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Comments (2)
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  • zaw77
    , contributor
    Comments (54) | Send Message
     
    Hi paul, great call - GDX was near $28 today, I bought some $DUST in pre-market at 14.55 - already in green. $DUST made new 52 week low at 14.21. We should see GDX trying again to broke 28, right - Gold strong resistance at 1350 - your thoughts ? Regards, Krzysztof
    10 Jul 2014, 04:21 PM Reply Like
  • Paul Mosgovoy
    , contributor
    Comments (119) | Send Message
     
    Author’s reply » Good work,

     

    In the green by the close is highly important.

     

    It was a big reversal today for GDX and DUST. Tomorrow might open and test that reversal or just keep going (lower for GDX and higher for DUST) from here.

     

    Sometimes after so much volatility, the market will congest for a few days. Do not be surprised to see DUST do nothing for a day or so (maybe longer).

     

    I would suggest that an absolute stop location for DUST is today's 14.21 low.

     

    With such a big reversal, there has to be a lot of demand for GDX to make another high. That seems to be a low probability at this time.

     

    Regards,

     

    Paul
    10 Jul 2014, 04:42 PM Reply Like
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