Using the GDX as a Proxy

This is as good a lesson in Chartology as any.

This is the Chart I am using presently to base trading decisions on in this sector .

It really is NOT too complicated if you take the time to study this chart for a few minutes

CLICK to ENLARGE

gdx111

A…We are below the Head and Shoulders Neckline ( Neckline of Doom) > Mid Term Bearish

B…We are in a well defined Downtrend > Mid Term Bearish

C…The red circles show 4 weeks of consolidation before an unambiguous breakdown , presently we are 2 weeks into the third consolidation and we have broken above the short term ( blue dotted) trendline > Short Term Bullish
Likely we are on our way to X , a simple retest of the neckline of Doom ( 22.50 or so) a 5% move.

D…IF the Downtrend Line and Neckline (X) are exceeded > a quick move to 26 is quite possible !

E …IF price bounces down from X …CAUTION is advised as we may be headed down to the bottom of the channel again , however often the first try is rejected and a move to the middle of the channel may occur BEFORE another attempt at a breakout occurs , which is often successful

F…Look at the TSX momentum indicator on the bottom of the chart..it has 2 Short to Mid Term Bullish Aspects
1….Positive divergence ( it is rising with the price falling)
2….Positive crossover ( see thumbnail to the right)

G…The Bottom so far for this move has been close to the 68.2% Fibonacci Support at about 20
IF this gets taken out > Very Bearish > likely target is the Head and Shoulders Price Objective at 12ish
ie…the Incredible PM Stock Rally of 2016 completely retraces !

H…The Black numbers each denote a reversal point within the down trending channel. Point 7 If it is reached has a ? because it will not be a confirmed reversal point until the bottom of the channel is reached.
IF the price exceeds this point , 7 will be erased and we will have a 6 reversal pattern ( Even numbered patterns are ultimately always continuation patterns. So if the pattern breaks out (up) after 6 reversals the price continues in the direction it came from (UP) . If however Point 7 comes to fruition and we go thru the bottom line that would be a Reversal pattern ( odd number of reversal points)

Hopefully for Newbies this little tutorial in how Chartology can help in your trading decisions has been clear and instructive. To learn more about this trading discipline , join us

https://rambus1.com/