Loading ...Following up on Sir Plunger’s note about the unfilled gaps
Embedded in my previous post, in the NTFRH article (obtained from 321gold.com) … was a link where NTFRH shared a private subscribers’ update of April 13th 2023, with the public, about 10 days after the fact.
This might help us understand why those gaps may or may not be filled. Sir Plunger, please opine …
An update of the progress of GDX for gold stock traders (as opposed to investors) to consider.
If you took gold stocks for a trade consider that GDX is now well into the higher high we wanted to see above the January high and is on the verge of filling the next gap. On this leg it filled the lower gap and now approaches the middle one, our next objective. Sure, it can fill the upper gap at 40.14, but it could also wait until later after a pullback/correction. Either way, it is important for longer holders that the higher high has been struck. That keeps the trend intact.
If you are a trader, you might consider taking some profit. One scenario that I could envision is that whether GDX stops sooner (at current resistance and gap) or later, after a hysterical rise to fill the upper gap, a weakening of the broad macro could pressure the miners into a correction. There is after all that gap down at 28 and if the world ends and crashes, another down at 22.72. Importantly, the gap at 28 could fill and still keep alive the ‘higher highs, higher lows’ uptrend.
I am not trying to scare investors* out of positions. But my job is to illustrate what I see. What I see is an ETF doing what we wanted it to do and becoming overbought. I may consider hedging at some point soon. I would like to try to resist profit taking on preferred holdings. Right now gold stocks are rising along with several inflation trades (e.g. commodity/resources related). Though gold miners have started to lead even the copper mining sector, they are not quite yet unique.
It’s been a solid rally. A pullback will come at some point and this chart advises it could be at the upper gap or more immediate resistance in the 36s.
Best regards,
GL
The gold and silver miners do not live in a fish bowl, so the macro will likely drive the sector into the Autumn.
By mid year, it will be clear that the collective West is in recession, with 10 year yields around 5%.
This headwind will likely see copper off 25%, silver off at least 20%, and the S&P off 25% to around 3200.
In this scenario, if correct, GDX will likely fill that gap at 28, and may even fill 22 gap, intraday.
Come Autumn, or before, the CBs will turn on the spigots again, big time, to avoid a collapse of the system, with 10 year yields at 5%.
Then we see bull moves across all sectors into late 2024.
In 2025, turn out the lights.
Sir Spock,
I’ve been called, time and again, for my youthful (47 year old) exuberance.
Hence I continue to read macro-stuff, and also gather info from the trenches.
A general contractor told me last week that he would not leave even a $3000 job right now, even in the most upscale of neighborhoods, as the recession signs are everywhere.
So, I’m not waiting for an official declaration of a deep recession.
The same way I was sold long ago, during the Obama heydays, that hiking the minimum wage would cause such extensive inflation, the likes of which we haven’t seen in the last 50 years. Or ever.
The way I interpret these Fed moves, politics etc. (elections are 18 months away), we might see a further attempt to kick the can down the road (even though the road has ended already, long ago) … “they” will cook up something to cause a massive spike in oil before this summer is over. Whether it happens after the May Fed hike, “they” need to engineer that sharp spike down in DXY, that everyone is NOT expecting (recession, high yields etc. mean USDX should go up …)
15-20% stagflation, overnight.
America is best at engineering false flags, whether domestic or foreign.
“They” want discontent. “They” want riots.
The “setup” has to be engineered for the next “election” to be mail-in ballot driven.
GL
Good point re the 2024 “election”. The elites will need to engineer a false flag to get their mail-in ballot election. Either that, or cancel the election, due to “extra ordinary events”.
2024 could be the last “election”.
Also, for what it’s worth, see this note about the breakdown in Copper/Gold ratio.
https://nftrh.com/2023/04/25/copper-gold-ratio-confirming-favored-macro-view/
The China recovery narrative will not escape the global recessionary trend.
FXI is the China proxy.
https://finance.yahoo.com/quote/FXI
In the meanwhile gold has tested the 1970-77 support again today.
My first entry in FCX was still in the red when it started the current down trend, so I could not recover any principal. Lesson learned.
The “win” is that I never bought FCX with new cash, only with deploying rotated proceeds/gains from PM juniors.
FCX is my copper proxy.
GL
But in case you are right, Sir Spock, I have a lot of dry powder, to buy GDX and NUGT when there’s blood in the streets. Trying to make sure that I win in both situations. LOL
GL
Yes it has been a very nice rally of price action, but my #1 concern and red flag is the lack of volume. Frankly the volume in this rally is not what bull markets are made from.