Loading ...Cycle Translation
Trying to figure out which will have the largest drop in the coming downturn, GDX or GDXJ. In this daily cycle top that we just had, GDX had a right translation but GDXJ had a left translation. In May of last year, GDX had a left translation and GDXJ had a right translation. A short of GDXJ came away the winner in the ensuing drop so I’m wondering if a short in GDX will most likely be the better play now. But, since GDXJ generally has bigger moves though, is it so easy to tell. Going back in history, it’s hard to come up with similar translation divergences like the one we just had, especially with such a large difference. Any opinions?
I’m lost in the translation
🙁
Thank you for your comment, Fully. I suspect many people are lost. Not anyone’s fault. Extremely hard to communicate to a diverse audience with varying backgrounds–I believe the vast majority of people who visit the site don’t comment. Some may not have English as their 1st language. Others may lack even the most basic familiarity with TA. On the other hand, one cannot turn every comment into a tutorial and then build on it didactically step by step.
Sometimes labels (with fewer rather than more abbreviations) go a long way those of us who are naive, but they are a pain to create. Too many demands for clear didactics may mean fewer good postings though.
Some generous soul might create a simple tutorial on cycles (including cycle translation) for the site. (I’m not the one since it’s on my list of things to study so that I know I have it straight.)
In any case, I perhaps like you feel a bit lost at 1st glance. My reaction was simply to put off looking at this post until later when I had time to study it in great detail, since I expect that it is fascinating. I hope this comment is not bad.
There was an article written recently, I think on Bloomberg, about how GDXJ is very illiquid – moreso than even GDX. In some cases GDXJ is the largest shareholder in some of the juniors they hold, so on a day where theres a large move in miners, it’ll be more likely the move gets exacerbated from purple selling and shorting GDXJ. So that’s what id bet on. Or short some of the top holdings of gdxj, if possible.
Small caps and lesser are not on most major exchanges. Unlike gold and seniors, expect GDXJ volatility by market makers so I don’t think the LR or RT are important indicators. I would attempt to address this in a post ……soon.