GDX Bearish Update

I do use trend lines but they can be so subjective that it can make them useless to use.  I draw many different trendlines but I do not post most of them.  In the case for GDX, we have a slightly down sloping trend while gold itself had more of an upward trend, since that June 2016 peak.

From the 2018 September bottom, the bullish move can fit well into a triangle, but it can also fit very well as a diagonal 5 wave sequence.  Even W, X, Y, X, Z would work.  In late February we had a peak after which GDX started a decline that can be part of another set of 5 waves in Minute degree.

Another 1-2 wave has to form after which we could see a huge spike to the downside develop. When that happens then a correction could be finishing and we should expect a huge counter-rally.

Gold has gone nowhere but down as the US dollar soared during the night.  With the holidays and a full moon, it could give a small bullish price move, but otherwise, this GDX decline is far from over.

I do have a small GDX short position out which turned green a few days ago.

The Gold/GDX ratio is at 59.13:1 today which is only a bit cheaper than what it’s been most of this year. The more the Gold/GDX ratio spreads the better, as that would make gold stocks seem cheap again.

Stories that China, Russia, and a few other countries are buying gold sure does not confirm the bearish mood gold is in.  They have to buy gold with US dollars as I’m pretty sure they are not going to use other currencies. They are trying to destroy the US dollar which has all been tired before in 2008!

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