Sep 14, 2013
1. Please click here now. That’s the GDXJ daily chart. While I don’t rate the quality of that h&s bottom pattern very high on the technical scale, it’s there.
2. Some teckies think it’s morphed into another pattern. To see that possibility, please click here now. They believe a 2nd head exists.
3. That’s possible, and it does make the chart look a little “cleaner”, but I wouldn’t fight too hard to create things on a chart. Things are either there or they are not.
4. Please click here now. That’s the view of the chart I like, and it’s the cleanest of them all.
5. You don’t need 250,000 trend lines drawn all over a chart to take buy or sell action.
6. In this case, GDXJ and many of your individual junior stocks just arrived at buy-side HSR, defined by the low of $41.60 on May 20.
7. Assuming you bought some gold stock in this general area, and I did, both via individual junior stock and ETF, where is your first profit booking area?
8. For the answer, please click here now. Note the sell-side HSR line drawn from the Sept 5 low. The low there, at $45 on the pro-style 24hrs chart ($45.32 on the less important 9:30am -4pm chart), is somewhat minor, but it’s there. It’s more important than it first appears, however. Here’s why:
9. Please click here now. I’ve highlighted the $45 24hr chart high that was hit in later July ($44.64 on the reg trading hrs chart).
10. Finally, please click here now. Suddenly, the $45 area goes from being of micro importance, to minor importance, to intermediate importance, because of the 3 minor trend highs/lows hit precisely in the $45 area on the 24hrs chart.
11. How much GDXJ should be sold at $45?
12. Well, not a lot, if you bought at $42 or higher. Also note the position of the world’s greatest oscillator, my daily chart stokeillator, on the bottom of any of those charts.
13. The lead line is at ten!!!
14. On the bearish side of things, there is enough power in that sell-side HSR at $45 to stun the bulls, and drive GDXJ to a new low, but the stokeillator suggests that is highly unlikely, although possible.
15. Please click here now. Note the February period on the chart. The stokeillator fared better than other oscillators, but the bottom line is that after it became dramatically oversold, GDXJ tanked another $5 anyways, before surging $10 higher.
16. To understand the case of a “flat line” event, look to the left of the chart. You can see that the stokeillator lead line couldn’t rise over the 40 mark, before rolling back into a sell signal. That’s unlikely here, but obviously possible.
17. The fog of negativity that enveloped the gold community this week has a good chance of counter-balancing the ultra-greed that enveloped it at GDXJ $50 - $54 in late August.
18. Where is GDXJ likely to bottom, if Friday’s low is not the bottom? For the potential answer, please click here now.
19. Note the green HSR line drawn across the $39 highs. If GDXJ is not totally washed out at $41.75, I can’t see the bears having enough power to push it under that buy-side HSR at $39… without a significant rally first.
20. It’s all very great to predict 10 baggers and 20 baggers, but we’re in a super-crisis, and only tentatively free of the gold stocks gulag. For all you know, there’s an elastic tied to your back, and a gold price smackdown yanks you right back into it. I’ll provide more coverage of the key HSR zones on the major junior gold stock ETFs on a daily basis going forwards.
21. A lot of technicians have tried to predict “the big dollar rally”, including Martin Armstrong. Nothing has happened.
22. My view is that it’s a waste of time, and testosterone, trying to call the “beeg move” in the dollar, either up or down. It looks like a giant wet noodle. Rates are unlikely to soar, and if they rise further, it will be because the chimps are moving funds from bonds to the Dow.
23. If the taper caper crew gets their wish, it’s not dollar-positive, unknown to all the gold haters. Funds will come out of the bond if the Fed tapers. They think more tapering will come, and a move from US-Bonds will be followed by a move to US stocks, but also to foreign stocks.
24. That’s mildly dollar-negative. The move into stocks will be accompanied by a chimp move out of them. It’s not so much that the Dow will crash, but that the percentage movement higher is becoming microscopic over time and price, as the Dow seemingly becomes “the place to be”. A move from 15,000 to 18,000 is a lot weaker move than one from 7,000 to 10,000, especially when it takes 3 times as long to happen!
Report Card Day! Please click here now. That’s the uranium weekly chart. Note 14,3,3 Stochastics series. Uranium stocks have been in gulag much like gold stocks. Angela Merkyll-Jerkyll tried to singlehandedly destroy the entire nuclear power industry, but China’s Gmen weren’t keen on burning even more coal, despite the Jerkyll’s promises that smog helps babies grow. I own quite a bit of uranium, but unfortunately there’s a chance that rather than blasting higher, the big consolidation between $4.75 and $5.75, impossibly, gets resolved to the downside. That would take it down to $3.75 on this uranium fund chart, and some uranium juniors could bit the dust. If you are terrified of $3.75 (I’m not), you could sell a bit here at the HSR created at $5 by the June lows. To view that set-up, please click here now. I have sell orders in the $5.20 - $5.35 area, via pgen, for what I bought in the $4.80 area, for my trading positions. If you are just a bit concerned, you could sell some stock in that area, if it gets there. Juniors stock investing involves some stocks going off the board. This is where ETFs can help mitigate risk, or a portfolio of individual issues. Be careful about over-concentrating capital in a couple of individual issues because if price of the underlying commodity enters the COP (cost of production) zone, you can get obliterated. See you out there, in your PGEN radiation suits, on the gridlines!