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Robert Edwards
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Contrarian daytrading technician who specializes in locating high probability short term trades while predicting price movement directions with over 85% accuracy. Most of my trading involves either extremely short term micro scalping of stocks or commodities (using 1 minute bar charts), or swing... More
  • GDX/NUGT Gold Mining ETFs Continue With Failure To Launch Today, 12/18/13 8 comments
    Dec 18, 2013 5:37 PM | about stocks: GDX, GLD, NUGT, DUST, NEM

    So the Fed decided to do a small taper and they threw out a carrot of keeping rates low. Just before the report, February gold futures hit $1244, which was $9 above the $1235 1:30 p.m. EST close. When the report hit, gold fell quickly to $1220, but then rebounded within a few cents of the high of the day. It appeared we would stabilize and likely end the day in the low $1230s. The miners looked like they were going to continue to build a base and close with a solid gain. But the dollar started gaining strength in the last hour when the stock indices made new all time highs. When gold fell below $1230, it dropped to a new low of day of $1215.20, pulling the miners down with it. Although Newmont Mining (NYSE:NEM) (outperforming all day) did manage to close up 3 cents for the day, the gold mining ETF (NYSEARCA:GDX) was pummelled and closed $20.86, making new lows on the close and ending just 35 cents above the recent 5 year low of $20.51. With two days left of trading this week, the weekly chart of GDX looks like this:

    (click to enlarge)

    If the gold mining ETF (GDX) gains more than 25 cents over the next two days, we could still have an up week, and continue the base building that was started recently. The bullish weekly Harami pattern projecting higher prices for the next 2-3 weeks, I wrote about in my last article, click here, could still happen, but gold needs to stabilize above $1200, and hopefully $1210. No real damage was done today, but when NUGT went from a high of $29.08, to close $25.97 down $1.23, today was extremely frustrating.

    I continue to hold my NUGT/GDX/NEM shares and continue to believe any new low in GDX should be extremely marginal and we should continue to build a base to launch from. End of year tax selling should be ending, and there is no more headline risk for now. Despite today's failure to launch, I still expect a relief rally to occur, now that the Fed has spoken and there is more certainty regarding tapering. Today's late day selloff appears to be overdone.

    Disclosure: I am long GDX.

    Additional disclosure: Also long NUGT & NEM

    Stocks: GDX, GLD, NUGT, DUST, NEM
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Comments (8)
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  • njtoms
    , contributor
    Comments (22) | Send Message
     
    Good Article. As you I Think the Tax Selling has Reached it Nadir. Maybe I'm NUTZ, but I Picked Up more NUGT at 25.96 B4 the Close. Thanks, Robert!
    18 Dec 2013, 06:10 PM Reply Like
  • njtoms
    , contributor
    Comments (22) | Send Message
     
    We are Slowly Recovering now in AH's 1223.00 at 6:39pm CST. NUGT at 26.39 in Afterhours. Perhaps and even possibly R.E.'s Supporters May Win After All? GL to All!
    18 Dec 2013, 08:12 PM Reply Like
  • njtoms
    , contributor
    Comments (22) | Send Message
     
    So, I Finally Become a R.E. Teamer and Everyone is Gone. Guess, Nothin Surprises Me anymore.
    18 Dec 2013, 09:59 PM Reply Like
  • UncleSam187
    , contributor
    Comments (177) | Send Message
     
    Holding strong on GDX.
    I sold some otm weekly calls that expire next week. Ex-div of .45 coming this month which helps with recent selling.
    It's not like the Fed did anything surprising. I was most surprised the major indices went up so much.
    19 Dec 2013, 12:58 AM Reply Like
  • njtoms
    , contributor
    Comments (22) | Send Message
     
    Well, it wouldn't be a normal day for NUGT Holders; to Start the Day with More Bad News. Gold down nearly $30. 1204 ish at 5:59 AM CST. Gonna need a lot of Luck today.
    19 Dec 2013, 07:54 AM Reply Like
  • Lumia_920
    , contributor
    Comments (79) | Send Message
     
    Dear Robert,

     

    I have been following your article on NUGT from sometime. You really build confidence . But I am shaken up with the dropping gold price. I have buying at $27 and $33. Not planning to buy anymore. Seems like a r/s is in near future if GDX drops below $18. That will make the situation worse. What is your opinion on NUGT now. Im curious to know your buying price for NUGT.
    21 Dec 2013, 08:49 PM Reply Like
  • Robert Edwards
    , contributor
    Comments (412) | Send Message
     
    Author’s reply » I don't see gold trading below 1155 and hopefully 1180 will hold. If correct, we should start basing and then going up in gold and then outperforming in GDX and NUGT instead of underperforming. Still have $50 target in NUGT.
    23 Dec 2013, 11:54 AM Reply Like
  • Lumia_920
    , contributor
    Comments (79) | Send Message
     
    Thanks Robert. I will closely interact with you to monitor NUGT :). Thank you
    24 Dec 2013, 02:13 PM Reply Like
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