GDX/NUGT

I'm covering GDX/NUGT as well as just having covered GLD/gold as they seem to be among the most popular trading vehicles right now judging by the email requests I get every day, but after this I need to move on.

My opinion of positions in GDX gold miners) long or NUGT (3x long gold miners) are not very different if any different than GLD. If there is a larger base for a bounce in any of these that makes it a more stable position, than I may change my mind and consider them as a short duration trading position.

If of course there was to be a much larger base development in the area, then I'd be looking at the possibility of the pullback signals having completed, but at this point I think that is the lowest probability based on the objective data and confirmatory data that we have.

This is the 1-day gold futures chart. This chart is almost reminiscent of an old time record player stylus or turn-table needle. (I can't believe I said old time as I grew up with these and 8-tracks followed by cassette tapes!)

 There seems to be 1 solid point of positive contact on the gold futures chart as you can see.

Gold miners don't seem to have the same size divegrence, but they do seem (and have for a time) to have a wider, more stable base area.

 This is the daily chart of GDX on the same platform. Notice the two areas of leading positive divergences as well as the red arrow that would be consistent with the recent "pullback signals".

 GLD and GDX have a fairly tight correlation recently so analysis for one is very close to analysis for the other, I think the biggest difference at this time is the 2 charts above and the look and feel that GDX has a slightly more stable basing area which should be corrected on the pullback we expected and thus far have seen.

 The GDX 2 hour chart which is quite significant also shows these two areas rather than 1, more clearly.

 The GDX 30m chart shows the more recent of the two areas, positive with the pullback signal seen in gold as well.

Typically when we see a chart on the longer side of the timeframe scale like a 30-60 min chart with a positive like this and then a negative following it, most often it turns out that the pullback is CONSTRUCTIVE, meaning that it usually sees deeper/stronger accumulation which creates a larger/stronger base that can support a larger/stronger and longer upside move, THIS IS THE UPSIDE MOVE I WANT TO PLAY LONG IN GOLD/GLD/GDX OR EVEN NUGT AND WHY I HOLD NUGT LONG AS A CORE LONG POSITION.

 GDX 15 min shows the same pullback signals that we expected and a pullback as we expected, however once again the positive divegrence just preceding that signal is clear as it is in longer GDX charts and gold/GLD.

 Even a more detailed 10 min GDX chart shows the exact same and like gold, we have near term or short term positive activity which I believe can lead to a "misleading" move to the upside or perhaps just a consolidation.

Again when I say "misleading", the only reason is as you know I have expected a constructive/positive pullback in gold and miners, a move up from here on such a small base/positive divegrence could certainly give the impression that the overall pullback is over and that is why I urge caution and why I warned we might see something like this in the quoted text I have pointed out numerous times the last couple of days.

 NUGT on a 5 min short term chart displays the same signals as GLD, gold and GDX and therefore offers good confirmation. It also shows the same short term positive activity and a gap above that could be an easy target for a bounce. 

It must be noted that the warning of "Deceptive behavior" was a "possible" warning. Either way, whether a bounce or just a consolidation, I do not feel comfortable with a long Gold, GDX or NUGT trade here and that's why I have said I think they are for more aggressive traders.

This NUGT 2 min trend may be a little to short for today's activity, but the past activity is unaffected by any data glitches this morning.

The same pullback signal is present as well as the same positive activity in the same area, on a 2 min chart it looks more impressive, but that is just because the shorter charts are more detailed and their signals mean less than longer charts.

My opinion remains the same, unless there's a stronger base area in the area, I personally would not risk playing a long, but stick to the larger, higher probability play of buying in to a constructive pullback with good signals for a trade that should not only be stronger, longer, but much higher probability and in the end, less risk.