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Stock, Options, ETF and Commodities Investor; My educational background is in Computer Science and Accounting with significant entrepreneurial and Fortune 100 Corporate experience in Information Management and Technology services in industries including: Consulting, Oil and Gas, Manufacturing,... More
  • Bullish Cycle Trend For Gold And Miners 3 comments
    Apr 10, 2014 6:34 PM | about stocks: NUGT, JNUG, GDXJ

    On March 7th, I published an article titled, "Correction Ahead in Gold" published here. We did in fact have that correction and it was a nice ride for those of us who got on the short side of the trade. JDST and DUST were two examples of rewarding trades for the move down.

    After the last taper and following the down move, we spent some time going sideways, but now have confirmed a bullish trend in Gold and the Miners. In fact, Americanbulls.com now has long recommendations on JNUG, GDXJ and NUGT. Those charts have all confirmed bullish in the near-term.

    Some of the collaborators on Robert Edwards forum have suggested that we might get a little bullish action and then reverse again for another downward move to the 1260-1270 region in Gold. While this may be true, I think it is a little early to make that determination. One thing we know we need to be on the look out for, is the next FED taper. Each taper so far, there has been at least a small push downwards in Gold and miners, before a recovery and run. The next FED meeting is April 29th and 30th, so we will need to watch closely as we approach those dates for where we are.

    In the meantime, here is the latest Daily Gold chart:

    (click to enlarge)(click to enlarge)

    The bullish view:

    MACD has crossed over to confirm a bullish cycle.

    It is trading above both the 50-day and 200-day Moving Averages, following the Golden Cross of the two just recently.

    Volume is healthy, RSI is neutral and stochastics are neutral which should not get in the way of a decent rally.

    The point and figure chart on Stockcharts.com, shows a bullish price objective for Gold at 1440.

    Conclusion:

    At this point, I don't know whether we are likely to set up for some of the longer-term patterns some readers have suggested. This could come to pass. And, as always with Gold, I always hold a skeptical view as to the next move and when it will start. But, the daily charts have been good indicators for me successfully trading the Gold cycles.

    As long as Gold stays above the 1312 level support, I see a bullish cycle for Gold and the miners. 1440 would be a very nice target to achieve if we can get there, but I'm going to watch the chart to see what it tells me. If we move upwards very fast, we may get to overbought levels that would push us down. Considering the price action has been moving relatively slowly, I think we could gain some momentum, especially with the markets pulling back, but expect the momentum to slowly build. Prior to the FED meeting at the end of April, I will be watching the charts for indication of when to take profits, or will take most profits off the table going into the FED meeting.

    Disclosure: I am long JNUG.

    Additional disclosure: I am also long GDXJ and JNUG calls. I may trade in and out of NUGT, DUST, JNUG, JDST, GDX or GDXJ as well as buy or sell calls, puts and spreads on any combination of these to work this correction, but prepare to go back long Gold and Miners once the correction is completed. The thoughts and opinions in this article, along with all stock talk posts made by the Author, are my own and are shared on the basis of helping others learn, to provoke other points of view that help us all on our journey to become better investors. My posts are never intended to provide investment advice. Investors should always view multiple sources of information in their due diligence process.

    Stocks: NUGT, JNUG, GDXJ
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Comments (3)
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  • Growfast
    , contributor
    Comments (294) | Send Message
     
    Author’s reply » Please ignore the statement in my additional disclosure as I copied that from my prior article and missed the need to edit the following statement:
    "to work this correction, but prepare to go back long Gold and Miners once the correction is completed."
    10 Apr 2014, 11:19 PM Reply Like
  • Growfast
    , contributor
    Comments (294) | Send Message
     
    Author’s reply » Friday turned out to be ugly for the Miners and Americanbulls.com already shifted their view to "short" on NUGT, JNUG and GDXJ. They may turn out to be right on this call.

     

    Gold held its own staying above the 1315 support, but the miners went down with the stock indexes. This tends to happen during market index corrections, similar to the one we had in February earlier this year.

     

    I'm thinking the markets may get a bounce starting Monday or early next week off some of the support levels, especially for the Nasdaq at 4000. This I'm hoping will bring some strength back to the miners, especially if Gold will maintain some upward momentum as well. When the markets get back to more normal behavior, I think the Miners will again return to their tight correlation in moves to the Gold price.

     

    Some analysts are writing that they think Gold will continue upwards in the near-term, but fall back down again to the 1260 to 1270 level.

     

    While we had the big pullback in the Miners Thursday and Friday, all 3 charts for JNUG, NUGT and GDXJ still are in the bullish cycle on the MACD histogram, although very slightly above the line. Monday will be a crucial day in my mind, for whether the bull cycle can hold, or whether we go bearish on the miners in the near-term.
    12 Apr 2014, 05:29 PM Reply Like
  • Growfast
    , contributor
    Comments (294) | Send Message
     
    Author’s reply » With the knockdown of Gold earlier this week, the trend has now reversed to a bearish cycle trend on the charts for Gold and the Miners. Appears best to be on the sidelines now, or with positions on the short side.
    17 Apr 2014, 04:53 PM Reply Like
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