Tag Archives: Gold/Gdxj Ratio

Gold Stocks GDX Update!

 

Gold Going To $3000!

GDX has been on a rally which many think was a major bottom as the above analyst thinks gold is going to $3000 soon. What these crazy forecasts are telling us is that the US dollar has to implode in a major way, before gold ever breaks out again. The 2011 peak was already a gold/silver mania peak which I documented very well. At that 2011 peak, the majority of analysts were all extremely bullish yet gold stocks imploded ignoring all the fundamentals.  Most people couldn’t tell you what caused the decline after 2011, and I bet they still can’t tell you what lifted GDX in early 2016!

Sure GDX formed a bottom and it even has a decent “C” wave decline, but that doesn’t mean that GDX is in a real bull market! In a 4-year + decline,  gold stocks had many rallies and they all resumed their larger bearish trends. It may take the rest of this month, but any new bottom will help make my bearish case. The US dollar is in a bull market that very few understand, as the US dollar bull market represents “deflation” not inflation. Any emotional gold buying moves will never last as they are not based on sentiment, but based on fear!  Gold investors will run like chickens if this bottom does not hold.

The Gold/Gdx ratio is not all that bad at 66.54:1, but this ratio should expand much more before gold stocks become very cheap again.

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GDXJ, 2011-2018 Review

 

GDXJ is still on a bit of a rally like gold did today as well. With this chart I use the 50-100-day MA which works as well.  From the top we started with a Death Cross which no sane technical analysts should ignore but investors sure ignore this deadly indicator. Back in late 2017 we had another Death Cross so I remain bearish with my positions. I will not make it public how many positions I have in anything but will give a cash out capital base once all present short positions and PUTS have been closed off.  This could take the rest of 2018 to happen.

I have given my full trading account numbers to my friend so he can witness what I’m doing.

The Gold/GDXJ ratio this morning sits at 42.5:1 which is the cheapest it has been all year!  This is good, but I want this ratio to expand much more by the end of the year. A Gold/GDXJ ratio of 62:1 is very cheap, so we still have some ways to go. All my ratio calculations are in a “Pool” as well, as it is one of 8 core indicators that I use.

Maybe some people find the lack of wave counts unreal. I’m not a day trader or an investor, but more a positional trader, as finding the right position for a reversal requires a far better job at the analytics. I look for 5 wave moves in Minor degree or larger as I sure do not want to miss any 5 wave sequence again.

As far as I can see, my gold related wave positions will “Always” have real money behind them except for the short times that I may be in all cash.

“ALL” those pretty wave counts you see as counted by the majority, have “No” money behind them, as they show me they have nothing else better to do than flip numbers and letters around like they are hamburgers. Betting against all those gold bullish wave counts is a no-brainer for me.

The 2011 peak was a 30 year mania peak, which we will not see happen again until 2041, or at least I won’t see it, as I will be having coffee with RN Elliott by that time!

We get out of the EWP by what we design it for, and if flipping numbers is all you want to do then that is all you will get. I can never make any money based on any popular wave counts out today!

 

 

 

 

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GDXJ 2011-2018 Review

GDXJ hit its mania top in late 2010 and then proceeded to double top and  implode in a 5 year decline. Since this 2011 peak I had little understanding how a 5 wave diagonal wave structure is supposed to count out. I’m a fast learner as there are two major types of diagonal 5 wave declines, besides all commodities are zigzag bull markets that can span decades. The zigzag “C” wave ending 2010  is close to 41 years in the making. The next 5th wave in Cycle degree will also be another big zigzag, which will not peak until 2041. (Gold SC Wave III) Silver is a prime example of the zigzag world that commodities are “always” in, and using the EWP to count stock market type counting in commodities will not work.

This so called bear market is far from over as the last of the zigzags still has to play out. This could take to the end of November, maybe by the 21st of November 2018. No price support ever lasts and I’m sure this $30 price will not hold. Any bear market rally must always retrace itself back to the point of origin, and lower. If gold stock investors can get fooled by an Intermediate degree bear market rally, then they will certainly get fooled once the Primary degree “B” wave top is completing.

The Gold/Gdxj ratio has also been hitting a price brick wall at 39.27:1, which should increase as GDXJ continues with it’s bearish trend. I also have a small wedge showing which is a very bearish pattern. I don’t have any bearish positions on GDXJ but I do with GDX. I will be tracking about 3-4 ETFs and all the entry sequences I have mention would just be cloned for any other bear or bullish reversal we will run into. All the work I do is also scalable from the smallest home trading base to larger trading firms or partnerships. GDX, GDXJ,  IAU, GLDM I will consider to use for the capital base that I might have by the time this all hits a bottom later this year.

Deflation is the name of the game, not inflation as the world is coming off the biggest inflated asset world ever, and all commodity asset classes will take a big hit. The entire world is sitting on Death Crosses including gold, and if I ignore this simple fact than I would be wiped out like the majority always do. My buddy and I are having another lunch meeting on Wednesday, where we can spend 2 hrs into covering what I see on a one-one basis. I will be throwing PUTs and Calls into the mix but only PUTs at this time.

Since GDXJ will be off the charts we could expect anything between $8 and $13 as a bottom reversal window. I like to use the “window” description as all windows close shut. Your either in the position you want or your out. Betting on the markets to go down must have impeccable timing in order for it to work well. If you only know how to trade the markets in a bullish trend then we are only running at 50% efficiency or worse. The only way to get wave pattern theoretical maximum is by planning all the trades we expect to happen in the next 3 years. Even then, if we can only capture 80% of Wave Theoretical Maximum we would be doing extremely well.

This is not a horse race folks, as trading is an infinate game where we only have dropouts. I’m a gold bear rider or a gold bull rider, and the only thing that matters is that we achieve a new personal best trade. All the markets are always bluffing us with a pair of “twos” compared to my 4 aces that I want in my hand at all times.  Of course an extra 3 aces up my sleeve always helps. 🙄 Only my one on one paid consulting clients get to see my aces and what they mean.

For now I will use a model USD $5000 based trading account as that is the minimum we should start with. Not until the late spring 2019 peak will we know at what numbers we cash out at. Trading is all about taking the minimum risk capital, and then parley that into something we can use as a home based trading accout.

Trading is about avoiding all bear and bull traps, and that information is free on the internet today. The problem is nobody wants to do the work required to detect these traps, as everybody wants a get rich quick answer. My goal is to eventually draw $13,000 CAD per year which would give me a combined income of about $40,000 CAD per year. I assure you, I would be living high on the hog at $40,000 per year!

 

 

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GDXJ 2011-2018 Review

I know that there are many other good gold stock related offset trade with and GDXJ shouldn’t be ignored. Just from what I see is that I will try and allot a small bunch of US dollars for this. We have no real track record but as long as we see that Cycle degree top we can track all the rest.  Maintaining and  fine tuning  is a continuous job.

I have gone the full Monty on this so you can see what’s possible with simple lines and observations of gaps. I show the gap where GDXJ came to a screeching halt and reversed dramatically. ($55) Investors take those kinds of hits but traders that were on the ball bailed out.  I had a pot stock that the same basic move and I let it go for as long as I could, I then bailed out. About a $5000 CAD cash haul. I do not care about the percentage bullshit thing that investor do, because I know that a good cash haul will help me push to $21,000.  If I had a bigger account I would hit this with short bets.

Even GDXJ only has one bottom as it needs two folks (A and C). Where is the second bottom?  When you look at this chart and think wow it’s going to the moon, then stop and think about the Death Cross on weekly gold!  The wedge sure tells me the same thing, so I’m very bearish on GDXJ. All the horizontal lines give us the whole Fibonacci numbers which I “Always” use even if I don’t post them.  Since GDXJ stopped close to $55 we know that $89 could be another peak.  It also leaves the last $144 fib number as your last one. $89 would be my first target because it has to go higher than my 4th wave peak in Intermediate degree. $55×1.618=$89  To me a target between $89 and $144 is doable.  A correction at $55 would be something to watch out for when the time comes. In this case never test this until it crashes below new record lows.

I gold bulls are convince a bull market is coming but I just love a good old fashioned gold bull trap! Every complacent gold bull is going to get a rude awaking when this crashes into the fall.  Look at that “B” wave bottom in Primary degree which I kid about being a Grade “A” controlled entry EWP number.  “A”waves in the EWP and this is a big one in Primary degree.  Whats going to happen in the next 3 years is a once in 30 year event that will not repeat itself until 2041 when gold hits $2225.

In general since January 2018 the Gold/GDXJ ratio has barely changed since then. Gold/GDXJ ratio at 38:1 is hitting a brick wall, so that also adds to my bearish out look.

Cheap in the Gold/GDXJ ratio is 62:1 which may not get hit but we want to keep an eye on it on the way down.  Another indicator I have but have not posted, is that the Market Vane reports gold traders at only 50-50 bulls to bears, this is not good as we want this number skewed dramatically.

I know that the USD is on a much bigger bull market than we all are expecting, but I know that it can happen as SC degree US dollar is a real kicker in this gold bearish phase.

When this hits bottom then expect the USD to make a big crash of some type that will push all gold related assets up. It could be one wild ride so any controlled entry sequences must be worked out first. I use about 5 steps and adjust if things move fast.  Most of my trades are done at nigh while markets are closed for early execution. This way you don’t have get out of bed in the morning.

 

 

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GDXJ Gold Stock 2011-2018 Review

 

It took me a long time to count out the GDXJ bear market, but only until I concentrated on diagonal wave structures did it start to make sense.  I thought we would get a zigzag bull market but that has no materilzed by any streach of the imagination.  The fast 2016 move up  has been followed by a bearish phase that looks nothing like a correction that has finished.  Many of the Gold stock ETFs I track had new record lows in early 2018. This is well over a year where gold stocks are out of sync with each other.

In the 2008 gold stock crash, they were not this far out of sync as they are now. Even though gold has shot up a bit in the last few days, these ETFs have been rather subdude.

The big question is if the 2016 rally, is not just another bear market rally!  Gold analysts have been very bullish but yet gold stocks seemed to be ignoring the bullish rhetoric.

One undeniable fact is that all bear market rallies get completley retraced, and about the only way we can confirm this is when it happens. Support means little as it’s always a question, “Support for what?” Support for the next leg up, or just temporay support before the next trip down?

The straight move up from the 2016 bottom is typical for a bear market rally so until this proves out I will remain bearish on gold stock ETFs.  I own one gold stock and a gold stock fund that pays some dividends which I will keep, otherwise I have been short several CAD gold stock ETFs and have no plans on closing them off.

From what I see may happen, is once this new low materilizes then we will be swamped with good buying opportunities, so those that have a bit of cash might be lucky enought to take advantage of it. I think we should end on a Primary degree “A” wave, which should be followed by another huge bullish move in 2019.

What this gold stock rally has done, is get more people excited and involved so when the next bullish phase comes along these added investors will push the markets much further north than anticipated.

The Gold/Gdxj ratio is sitting at 39.36:1 which has been about the same for most of April and May 2018. I would rather see it get closer to 49:1 before GDXJ may look cheap again.

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GDXJ, Trapped In The Cone!

Every gold stock related ETF or index has a slightly different pattern to it, especially this sideways pattern that GDXJ is trapped in. Some of them are pointing up while others are even pointing down.  GDXJ is trapped in the cone like cattle boxed in a canyon, sooner or later they’ll panic and try to break out.

To which price level is the trapped cattle going to flee to? The price level that has the weakest link in the fence!  I could give the same bullish song and dance as all the gold bulls are telling us which is the easy part. I tried that, but started to realize that GDXJ was having great difficulty in trying to break out.

This forces a review going all the way back to the 2011 peak and initiate another wave count from a diagonal perspective.  That 2016 peak was very impressive as I called for a correction at that time. Corrections have to look like one of my 3 simple patterns, but this pattern doesn’t fit the bill at all when I made this up last night.  Being trapped in this situation can happen when a false start or bear market rally is in progress.  Every bear market rally retraces itself sooner or later, and it’s up to GDXJ to “Do or Die” soon. I will be posting more ETF’s and as far as I see it these wedges are very bearish.

In a diagonal 5 wave decline the 5th wave can always contain a zigzag which can produce violent moves to the downside in a very short period of time. Single stocks are much worse to figure out as they can run against the grain for very long periods of time as well.  “Buying on the dips” is what the bulls are saying, but that suggests that they are convinced they are in a big bull market. Pattern, not price makes a bull or bear market and this sideways pattern sucks because no exciting bottom has even occurred yet. That late 2016 low ($28) would have to be the “bull market” corrective low,  if we are already over on the bullish side. Gold stocks opened up with a small jump this morning, but it has to keep going and bust out of this double cone trap.

The Gold/GDXJ ratio is not at any real extreme, but for the last month it has been hitting the 39:1 range, which also can act as a brick wall when the ratio no longer compresses. There are too many bulls around for too long of a time period, with gold stocks going nowhere. Where are the buyers?, as volume has also been completely subdued!

If we draw a horizontal line at the $50 price level, and follow it all the way back to spring 2013, we can see one lonely little gap had opened, from which GDXJ was repelled.  This still makes the $50 price level a serious resistance threat as well.

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GDXJ, Gold Stock Bull Trap?

The start of the bull market in early 2016, soared with small subdivisions This bullish phase ended in mid 2016 at about the $50 price level before GDXJ started to turn down again. For just about 2 years, GDXJ has been grinding sideways for far too long in a bullish correction. A horizontal wedge has also formed which compounds and confuses the next potential move. If we look at it from a bearish point of view, then it’s an easy guess, otherwise it can soar out of this wedge just as easily.

Even now the Gold/GDXJ ratio is hitting a break wall with todays reading at 39.8:1 which makes GDXJ a bit more expensive. This ratio should spread, as any decline intensifies. I have 62:1 as my cheap ratio, but we may never hit that again for a very long time.

Most of the gold stock related ETFs also have this sideways wedge,  so it’s not just some isolated pattern.  The well heeled gold stock contrarians who have very deep pockets will just be buying more, but for a new player this decline would hit them hard.

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GDXJ And SIL ETF Reviews

GDXJ is a gold stock related ETF. The great thing about ETFs is that we don’t have to worry about any single company fundamentals. All we need is a very good understanding, where gold stocks are in their bullish or bearish phases. Recently the story was that investors were dumping gold related assets, to jump onto the Bitcoin Mania bandwagon. Of course the Bitcoin bandwagon has now crashed and is burning in a huge electronic fire. No sooner that this bearish news about gold came out, GDXJ stopped falling and has now started to soar again. GDXJ reacting the opposite way of bearish news, is a very bullish sign in itself.

You won’t find those indicators in your trading tool box, but smart contrarians look for those signs all the time. I see this action during many “ABC” corrections.

During last weeks Bitcoins carnage, and a $9000 price crash, gold stocks kept right on trucking along.  I have dropped my degree levels down to Minor degree again, which means a bullish phase is still coming. Any “C” wave bull market, could send this gold stock related ETF to new record highs.

Any bullish phase ends when many bulls are present, like they were back in mid 2016. I called for a correction at that time, which ended up being about 18 months long. Long drawn corrections are necessary to wash out all those emotional investors, that have no clue about longer term cyclical investing. They panic anytime the market goes against them, forcing them out just before the biggest bullish phase starts to move. I can’t  give any specific “buy” or “Sell” instructions, but I can only relay my bullish or bearish mood at any given time.

The Gold/GDXJ ratio is still relatively cheap as it’s at 37.85:1 at the time of this posting.  This has compressed a bit from a recent base of 40:1. My extreme expensive Gold/GDXJ ratio is 10:1, so we have a long way to go, before this gold market becomes expensive again.

 

SIL has a different bearish phase, that other ETFs didn’t have. SIL just finished a bigger and longer correction, but has now synchronized in time with other turnings. From the 2016 bottom SIL produced a stunning move, which can only happen in a very short time span. The SIL bandwagon also had to crash, producing a bearish phase. Bearish moves in a bull market are necessary to get rid of all those freeloaders, that think they can just jump on at anytime they want. Emotional investors will always get burnt when they chase a bull market, or when they try to take their entire positions all at once.

Contrarians do not do any panic buying or selling, as they were buying during the entire 2015 decline, with GTC orders. Everybody hated gold stocks at that time, but look what happened shortly after. The majority always gets in at a top, and in the case of SIL they left a 360% gain on the table. I believe SIL can break to a new record high again, as this second bullish phase starts to kick in.  At a minimum, SIL would have to completely retrace that mid 2016 peak of $54. This is so close to a Fibonacci 55 number, where a 61% (1.618)  move above $55 will get us close to the $89 price range. SIL would end up just below a major double top.

The thing with anything silver related, is that during its entire life, it contained wild and crazy zigzag moves. These zigzags fit best as diagonal waves. A single zigzag bull market fits very well into any diagonal related run.

The recent Gold/Sil ratio is sitting at about 39.66:1 which is still very decent from my perspective. When the Gold/Sil ratio starts getting closer to 20:1, then we may have to look at the bigger bullish phase again.

Due to the fact that commodities are all leveraged, Elliott Waves don’t always act the same. Fear is the main fundamental that drive commodity prices up or down, not supply and demand numbers. Fear of missing out, fear of gluts and fears of shortages, is the real driver of prices. Hope and greed don’t have very much time to set up between mini panic attacks, while in the stock markets, it could take years for hope and greed to set in.

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Gold Stocks GDXJ Bull Market Update

Gold stocks with this mid sized gold mining companies have finally started to act in a bullish manner, even though they are lagging gold at this time.

Any lagging on the part of gold stocks is not a concern at this time because the Gold/Gdxj ratio is still on the cheap side at a bit under 40:1. Real cheap was 62:1 one which occurred way back in early 2016. There is lots of room for GDXJ to move to the upside so I don’t think gold stocks are ready to die. We have a higher low as well, which is the conventional description for a bullish phase.  I will not be a happy wave analyst until all gold stocks retrace the entire August 2016 top.  A new record high  would confirm this entire bearish phase.

When and if GDXJ gets closer to a 10:1 ratio then it will be time to look for a major top of this gold stock cycle. This may take until late 2018 to play out, but we have to be aware if this gold bull market will end sooner.  In time I may have to adjust my degree levels up by one degree, but that can always be adjusted at a later date.   It is virtually impossible to tell the difference between a “D” wave bull market and an impulse as both have the same bullish mood associated with them.  The only way we can know the difference is the choppy nature of the bullish run.

Some may be tempted to jump on the gold bandwagon now, but those emotional moves can backfire if gold stocks are ready for a correction. From the 2016 bottom to the mid 2016 top, gold stocks have gained close to 300%,  yet gold investors left that all on the table for the contrarians.  I doubt there is another 300%  gain from todays price, but, stranger things have known to happen.  The bullish move from the early 2016 base was not a vertical move, but “C” waves are  famous for going vertical when the party is ending.

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GDXJ Gold Stock Bullish Review

 

Gold stocks have been on what looks like a bearish trip, but we do have a potential, “ABC” corrective bottom,. This would, eventually, take the gold stocks into new record bull market territory.  Since I have a a potential early 2016 Primary degree “A” wave bottom,  we could be in a bigger triangle, by heading up to a “B” wave in Primary degree. All full 5 Minor degree waves would also have to play out. 

Any other potential “B” wave other than a triangle, could push gold stocks to new record highs, past the 2011 peak.  This doesn’t normally happen with a zigzag, as we would be short one extra move. I would also have to drop our present Intermediate degree top down one degree, which would eventually turn the entire move into a flat. 

We have time to think about this until we see another very bullish top. By that time the Gold/Gdxj ratio could show some extreme readings, but we are still far away from that happening. This morning the Gold/Gdxj ratio touched 39.56:1 which it has done only three times, since the start of 2017. 

This is far removed from the potential extreme expensive ratio of 10:1. 

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GDXJ Gold Stock Crash Review

 

 

Gold stocks with the GDXJ ETF has broken the wave 2 key support and has now pushed well past old wave 2 bottom.  Several other related gold stocks, ETFs,  and indices are getting very close to breaking new lows, as well.  At this time I can still get the rally and down cycle, into a corrective pattern, but another game changer would be if the blue “B” wave  in Minor degree does not hold.  

I have mentioned it before that, the entire gold stock bullish phase is a bearish rally, but still a long way to go.  Replace the A wave top with a 4th wave in Intermediate degree and we could have the makings of a zigzag crash that still needs to break below the $18 price level.    This is the least desired outcome as that would send my ratios into disarray in the short term.   Either way,  the ratios will be expanding all the way.   At that December 2016 low, the Gold/Gdxj ratio hit a bit over 39:1. Today that ratio is 39.53:1, which already makes it cheaper when compared to gold, than the December 2016 bottom. 

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GDXJ Junior Miners Gold Stock Review: 2010-2017

 

 

I believe that the big top back in late 2010 was the Cycle degree wave three, and the bear market that followed was only one part of the Cycle degree wave 4 correction.  The 2013 bottom has a special meaning, as there were many obvious reports of gold stock insider buying. Apparently they have a history of  buying just a few times in a bear market, and don’t buy as frequently as the seasoned contrarians do.

This bear market works well as one big zigzag, with the last 5 waves being a very ugly diagonal set of waves.  These types of waves are very common and are a real challenge to count out in real time.   When GDXJ hit bottom in early 2016, the Gold/Gdxj ratio hit 62:1. This was an insane number and represents and extremely gold stock oversold situation. Virtually all gold stock indices or ETFs gave us the same insane ratio indicators and we have to remember that when we look forward, up and down any set of wave positions. There is much more to the EWP than just mindless wave counting, which the majority practice.  The real contrarians have a far better understanding when buying low than any wave counter does because they have accumulated more wealth than any wave analysts I have ever read about.  

Anyways, I can go on and on about how inefficient wave trading really is as it will never change anything. They will continue to miss every major bull market that will come down the pike.

Before the 2016 spike in gold stocks you have to accumulate positions long before the bottom, which the EWP does not teach you. In reality the EWP has to confirm what the contrarians are doing and are going to do in the future. 

Even if Gold stocks are in a big fake bull market contrarians will never be left behind. (Primary Degree “B” wave bull market)  They know that markets travel from extreme oversold conditions back to extreme overbought conditions. It is the Gold ratios that give us an objective reading on the markets, and on Friday this ratio was about 31:1. This is the most expensive since the gold stock bullish phase began, but still far away from any extreme expensive reading of 10:1.

Just because gold stocks made a decline, I would be crazy to show you an extremely bearish wave count at this time, when I know my contrarian friend has been buying.  

This bull market will not end until we read about consistent gold stock insider selling, matched by an extremely expensive Gold/Gdxj ratio.  Many mainstream analysts, wouldn’t touch gold stocks at this time, but I bet they will turn bullish once a new gold stock extreme gets reached. 

GDXJ should eventually hit anywhere on the top of my trend line, and this will depend on the speed that GDXJ will travel at. This will be true with all the gold stock indices and ETFs. 

Short term anything can still happen, but longer term this bull market is far from being finished. 

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