Loading ...GDX + GDXJ – Classic Exhaustion Sequence – Top May Be In
I sold my NUGT in the opening minutes today and then waited for intraday structure to develop before taking fresh DUST/JDST positions at 2pm when the miners backtested a major resistance line. Buy support….sell resistance…it never gets old. I’m posting what appears to be a textbook exhaustion sequence in the GDX. If the GDX couldn’t close above major multi-year resistance today, it clearly is going to need some time to build cause with lower prices coming first.
People are calling today’s action a breakout and all the talking heads are advocating owning gold here….well gold looks way better than the miners. Again, I’m certain my views are in the minority 😉
The following GDXJ chart illustrates how I’ve been swing trading both directions over the past month. By always scaling into my positions (for best average position cost) and always buying support and selling resistance, I minimize risk and don’t have to get the timing of the trade exactly right…which I clearly am not. Nonetheless all my trades over the past month have been profitable and better yet, significantly more profitable than if I had just sat on my positions. There’s nothing wrong with buy & hold and swing trading clearly isn’t for everyone, but I’m trying to make a point that it can be rewarding while containing risk.
Note the spike & ledge looking intraday pattern today. A break below today’s GDX(J) lows could start a cascade of selling.
Compelling argument, no denying you’re track record and if I had the stomach for it (and hour-to-hour access to mkts w/o job interference :/ ), I’d be following your trades (I’m sitting tight) – thank you for the regular updates.
Thanks for the charts Mark, I always pay extra close attention to your work! GDX chart link below.
http://invst.ly/1ybp
Thanks Mark. Appreciated!
Thanks Mark for sharing your thoughts. I was reading gary savage blog and he is calling for another 12-15week of rally in gold, and silver…what’s your take on his current position per cycles?
During the 3rd week in May Savage was pounding his fist on the table saying the cycle low would be in early July and that prices were moving too far from the 200MA. That’s when I was absolutely loading the boat on the miners…May 18th onwards. On May 18th he published an article saying it was time to start hedging gold positions…literally at the absolute swing low!. He later claimed that he actually hedged in early May and covered his hedges around May 18th AND starting taking “modest long positions in miners”. So if you believe what he types, his outward facing public blog gives the opposite views of the market as his paid service which places you on the correct side of the trade. His opinions on what is going to happen in the gold and miner markets are so scattered and disjointed that no matter what happens from here he can always claim was correct because he probably said whatever actually DID happen at some point in his completely incoherent, inconsistent messaging. I’m sorry but the guy is a total hack as far as I’m concerned and I could care less about his cycles. I’ve never seen anyone who offers a paid service act as irresponsibly as him. I’m pretty sure the only people who subscribe to him have no faith in their own abilities and probably haven’t been subscribing for more than a few months…any longer and they’d have blown up their accounts. I’ve stopped reading anything he writes and I have no idea what his current take is on the markets.
Hallelujah Mark, glad to read this clear critique, I agree with it. I am normally not interested in dishing others work, but do many people have been damaged by his site and “method? one just has to speak up. You chose the correct word “hack”
but to answer your question, I don’t use cycle analysis in my trading whatsoever. I wouldn’t say timing is anything I’ve ever nailed…but I have good success knowing where favorable risk/reward entries ands exits should be. The more you trade the more you learn that keeping your system as simple as possible gets better results. I’ve heard Linda Raschke say the same thing…referencing the most successful traders tend to limit their trading to only the same 1 or 2 setups consistently, over and over….which wins out in the long run over people who try to assimilate every data point, oscillator, timing device, and anecdote in recorded history.
Right one can’t process all that info
appreciate the feedback…