GDX / NUGT Update

As you know, I only entered a partial GDX Nov. $25 call position yesterday and looked forward to filling it out, but at the right place with confirmation, so we patiently waited on that one today, I could have closed the position today for a nearly +16% gain, but I decided I'd rather just give it some time being the expiration is November, Theta is not that big of a deal.

I posted earlier today that a 1 min negative divergence had shown up on the GDX chart around 1 p.m. and thought it may lead to a pullback, which is what I'd need to fill out GDX, start a new position, or look in to something like NUGT long.

Here's what happened since then with good confirmation through NUGT and DUST as well. From what I see, the divergences are aggressive, but on shorter term charts and the important positives are fine, my interpretation of this would be that it's a fast pullback. I can't give an opinion beyond that in which I have objective data to support it, but my gut tells me this would only be the case if there were some last minute accumulation (the same thing I'd like to do) before a more significant move up than today's.

GDX

 The 1 min negative developed quite a bit.

*For newer members, if we have a 1 min (intraday, as the 1-3 min charts largely guide intraday trade) divergence (either negative or positive), we have about a 75% chance of a simple consolidation through time rather than through price as a pullback or retracement and that's about all. However, if the act of migration (which is when a divergence strengthens and moves to the next longest timeframe, in this case 2 mins.) takes place and moves to the 2 min chart, we have a 50/50 chance of a consolidation through time or one through price. The stronger the divergence intraday, the more likely it is to consolidate through price which in an uptrend is a pullback and in a downtrend a retracement.

 The divergence is more difficult to see on this 3 min chart because half of the window is taken up by volume, but the 3 min is negative so the divergence did migrate/strengthen.

You can see at first as the 1 min divergence was the only one in play, GDX consolidated sideways through time, but as the longer charts went negative, GDX consolidated through a pullback.

As the consolidation range's support was broken, there was two large volume surges as stops were cleared out.

 The 10 min chart going positive quickly yesterday was part of the reason I entered a GDX call and part of the reason it was a half size position as this was a new divergence and had not proven itself for me to go with a full size position.

Note there's no damage to this chart at all.

Now we even have a 30 min leading positive divergence in GDX, the first started BEFORE the F_O_M_C, which makes me wonder of course about the possibility of a leak, we were long GDX because of this positive divergence and gold going in to the F_O_M_C and took profits that day.

You can see distribution of GDX in to higher prices, this is when and where we exited GDX calls immediately before price backed off. Now of course we have a new positive which makes me wonder about something I'll get to.

NUGT (3x long Gold Miners) or 3x leveraged GDX.

 You can see the divergence today on NUGT as well, here on a 5 min chart and price moved aggressively with the divergence. This is not the typical "reversal Process", this is much faster which is why I suspect it's not a bearish event as mentioned above.

 The 10-min NUGT is undamaged, despite the 5 min being negative and leading at that, it did no damage to the 10 min.

I'm sure there's probably something more relevant than this as resistance, but it seems the whole number of $56 is where resistance became an issue today.

The NUGT 15 min chart has several different concepts displayed such as a Crazy Ivan shakeout at the far left range with a head fake move below first that sent price flying to an upside head fake move that sent price dropping to a new low under the range. This is why I say that these Head Fake moves are not only good timing, but they are used to influence the price action and to create more momentum, just look at the price moves proceeding the head fakes!

As I said I'd talk about above, I'm wondering in the pre-F_O_M_C positive divergence is part of a larger single divergence with the current one, which if that were so, would mean we have a head fake that is helping the current divergence accumulate even more.

The outcome would be a much larger, stronger, longer lasting move to the upside.

 DUST (3x short Gold Miners) or 3X short GDX. *For the GDX and NUGT signals to be confirmed, we'd need to see the opposite signals in DUST.

 Recall the 1 min negatives above, this is a 1 min leading positive so the intraday charts are confirmed.

Recall the 3 min GDX / NUGT were negative, DUST is positive so we have more confirmation.
 

Recall GDX / NUGT are still positive on the 10 min, DUST is clearly still negative on its 10 min. so we have confirmation here as well. I'm using the circles as 2 pairs, the first pair starts from the left and I'm using them to show relative comparisons between where price was at the circle and where 3C was so you can understand the divergence,

For instance at the far right (last two circles) we have a 3C leading negative divergence and the first circle (left) is around $30+ and 3C moves in to a leading negative divergence from there, then the second (last) circle is at the high or $36-ish, yet 3C is at a lower high, this is bad news for DUST and the move down already started.

As I said, I think this will give us a chance to add to or start new GDX calls or NUGT longs, the correction in DUST is a retracement, but as we are able to enter GDX/NUGT, DUST should continue lower, for DUST this is a simple "counter trend correction".

Of course we have to wait for the move to finish and then verify accumulation in to the move lower as that is what the move should do, THIS IS EXACTLY HOW WE STALK OUR TRADES LIKE A WOLF-PACK RATHER THAN SIMPLY CHASE AFTER OUR PREY LIKE AN UNTRAINED DOG CHASING A RABBIT.

Nice imagery huh?