GDX/NUGT Update

GDX and NUGT are moving toward a trade set up, there were a few things I was looking for and some of them are now happening. To sum up GDX/NUGT and the trade set up I'm looking for, lets go to the first chart of the range...

 First, this range appears to be a pullback from an earlier base/stage 1 that started trending up and pulled back to this range. Yesterday's update was more thorough as to the background information and larger Inverse H&S bottom ; you can find that here, GDX / DUST (Gold Miners Update) 

What we have above is a range with a few head fake or false moves that generated momentum, but the 10 and 15 min charts made it clear that this obvious rectangle was going to be pushed below support and because of the 30, 60, 2 hour, 4 hour charts, we know the probability is high that the move below the range is a head fake that is forming the lower end of a right shoulder in a large inverse H&S bottom, we just needed to see evidence of that by seeing accumulation and the 10-15 min charts start to go positive.


 As for short term action, GDX's 1 min chart shows a positive divegrence as price moved below the range.

 The 3 min chart shows the mechanism to push price below, a head fake or false breakout with distribution sending GDX/NUGT below the range where stops would be hit, short sellers would come in and supply would be abundant and cheap.

 GDX's 5 min chart also showing the mechanism to effect the head fake below the range and a positive leading divegrence once we got there.

 NUGT's 5 min chart shows the same.

 However, it is the 10 and 15 min charts like this NUGT 10 min chart that told us price was going to move below the range, it was and is the charts beyond 15 mins that tell us the probabilities are very high that this is a head fake move or what will be a false break down that is being accumulated. While the 10 min chart is not a shining example of a positive divegrence, there's a noticeable change in character from the previous , clear negative to a relative positive divegrence.

NUGT's 15 min chart is showing even more in the way of repair as there's a leading positive divegrence.

I'll be looking for signals in the 1-5 min ranges and confirmation between GDX, NUGT, DUST and to an extent, GLD to see whether this will be a larger "W" pattern or whether we may be close now, but this is one worth waiting for as I believe the price pattern implied target for GDX would be $44-$45 and that's conservative.