Robert Edwards'  Instablog

Robert Edwards
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Contrarian daytrading technician who specializes in micro scalping of stocks (using 1 minute bar charts), swing trading of stocks overnight, weekly stock option premium selling, pre-market and post-market psuedo market maker and stealth trading activity, and selling commodity option strangles... More
  • Gold Miners (GDX) Continue Weak...Bottom Is Not Yet 1 comment
    Apr 4, 2013 12:29 PM | about stocks: GDX, NEM, GLD, FCX, DUST

    Gold Miners (NYSEARCA:GDX) broke below support at 35.57 and are now trading at new 52 week lows. This projects a low of 32.50 and then a rally back to maybe 35 before GDX sells off again towards the lows. If the lows hold on the retest, then a sustained rally might ensue.

    The gold metal is now trying to find support around 1540 in April Gold futures. We should find support soon and I anticipate we could rally back towards 1580, and then move down towards 1527 or 1500 or possibly lower. If you believe in Elliot Wave Theory we are now in the 2nd down wave and after we bottom and rally we will then attempt the 3rd down wave that should test the 1500 price level.

    I still hold a bullish position in the gold miners by being short a couple DUST Sept 60 calls for 6.90. Being the triple bearish miner ETF, DUST has been one of the better performers this year. I have been forced to go long DUST to protect the calls which are now firmly in the money.

    I like Newmont Mining (NYSE:NEM) as it is outperforming GDX which includes many less profitable mining companies. One could be long NEM and short GDX or buy NEM on dips and short GDX on rallies. I also like Freeport-McMoran Copper and Gold (NYSE:FCX) as it is trading under $32 where it has a lot of support.

    On the basis of time, I do believe we will bottom in GDX and in the gold metal by June 1, 2013. Picking a bottom remains a bit tricky as the metal and the miners could go a lot lower than anyone anticipates, so be careful out there for now.

    Disclosure: I am long DUST.

    Additional disclosure: I am long DUST to cover the Sept calls I sold in DUST earlier in the year when I was more bullish on the miners. I may buy NEM and FCX in the near future.

    Stocks: GDX, NEM, GLD, FCX, DUST
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  • Retirefund
    , contributor
    Comments (770) | Send Message
    Concentrate on picking hard assets and not picking a bottom. There will be rewards....
    4 Apr 2013, 10:30 PM Reply Like
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