GDX / NUGT & DUST Charts

GDX is the ETF for Gold Miners, NUGT is a 3x leveraged long ETF of GDX and DUST is a 3x leveraged short of GDX.

Again, we have multiple timeframe analysis and I'll do my best to explain what I see now, when and where the DUST trade will kick in and when it will be back to GDX or NUGT long.

For the most part recently, Precious metals have been trading opposite the market and that includes miners more recently. I think it's pretty clear Gold is acting a a flight to safety trade so if the market is expected to dip, gold sees some inflows and silver has a correlation there although for silver analysis I posted a pretty exhaustive look yesterday in the archives.

I think GDX Calls / NUGT long are probably a very short term trade of maybe a day or so. Take a look and I'll try to put together the VERY early trends that seem to be emerging.

 This is NUGT (same as GDX) 1 min intraday with a positive at what looks to be a small triangle or some range, there's a decent probability that there's a head fake move below this range to hit stops as we see that about 80% of the time before a reversal on any timeframe.

This 3 min chart shows where there was heavy distribution in GDX/NUGT on the open of this week.

Today's divergence here is odd, but it's confirmed in at least 1 of the other 2 assets (DUST/GDX), I have a feeling this would be for a head fake move.

The stronger 5 min chart though is leading positive and if this wasn't there, I would have stopped all consideration of GDX/NUGT after that previous chart above.

Here's GDX 5 min also leading positive

This is what sold me, a 10 min leading positive in GDX, head fake or not, that should be worth a decent move in a short period of time (I'm thinking 1-2 days and that's why I chose the higher leverage of options over a NUGT ETF long).

The 15 min chart shows several trends, to the left a strong accumulation trend sending GDX higher in to initial relative negative distribution at the red arrow causing GDX to move sideways in a top and then a leading negative divergence signaling it's likelihood of a downside move coming any time which it did. The boxes around the timeframes are my estimation of accumulation, when and how much for perspective as well as distribution in red.

As you can see, the current positive to the far right is nowhere near as large as the positive to the far left, if it was I would have chosen NUGT as the trade vehicle, but since it looks to be smaller and shorter term, I thought options would offer more leverage and profit potential.

We have a GDX 30 min positive, this is where it gets speculative (analysis ) and tricky. I suspect this positive divergence is the left side of the start of a "W" bottom, the bar around time would show the top left side of the "W" and the positive divergence would be the first bottom of the "W" and the move I'm trying to capture would be the advance that creates the middle top point of the "W". 

So ultimately we may see a much larger base in GDX, just not right now.

DUST which is the opposite of GDX has a decent 15 min positive divergence/base here, but it has stalled, I suspect GDX moves up as mentioned directly above in creating that "W", Dust pulls back and as GDX starts to pullback to the second bottom of the "W", DUST will advance and I'd want to be long DUST there. Is suspect this divergence will turn to distribution on that advance and it may be the last DUST position.

However this is all fairly new, yesterday there was no short term indications so that's my feel, but we'll let the market tell us as it has started to today.