Years ago before the F_E_D's quantitative easing, gold miners use to lead gold. As the F_E_D backs out of accommodative policy, it seems that gold miners may be starting to lead gold again. Gold is usually bought in anticipation of inflation which is a rend that was clearly developing around June, however it seems (as is usually the case) smart money has been involved in this trend for a lot longer than that just like they were accumulating home-builders as the 2000 Tech bubble popped, a couple of years before the housing boom really took off.
In any case, the long term GDX chart shows a year or so long base which we've been tracking and trading here and there for the last six months or so.
On a 5-day chart, this is the inverse H&S pattern with an RSI divergence as well as volume confirmation, at least until the breakout, that's when volume should have gone up and didn't , we also didn't get any follow through days. The best we got were some divergences suggesting a pullback, but rather GDX just ranged.
GDX has been one of the easiest assets to confirm signals in as there are so many derivative ETFs that can be compared, but over the last 2 months we haven't been able to get anything approaching a decent signal which once again makes perfect sense since it has been stuck in a meat grinding range which we don't want to be caught in any way.
What I've really been looking for is a pullback in which we can confirm accumulation and strong signals to enter GDX on a long term basis.
The white box on this daily chart is where we entered NUGT (3x long GDX) long and exited it just at the breakout as signals were not confirming the breakout, there's been no upside follow through since we exited NUGT.
This is what has happened since exiting the NUGT long (+40 & + 50% gains),
this is exactly the kind of range we don't want to be stuck in and haven't had a trade in GDX since the NUGT exit.
The pullback I've been looking for would be below the neckline support (red trendline), as long as we can confirm accumulation on that pullback, GDX should be a very strong long term long candidate.
This is the 4 hour chart during the base, it looks great, but price has been hung up.
This 30 min chart shows the difference between a strong signals (when we went long on a strong positive divegrence) vs the trendless lateral slop.
Several charts have been calling for a corrective move which can come through a price pullback or through time consolidation, however the volume on the breakout was so bad, the entire thing looked like a head fake deal and the breakout is just about when retail finally noticed it after we had already booked a 50% gain in NUGT.
Short term charts look like this is one of the strongest pullback signals we've had in well over a month.
In my view, probabilities are high that this turns in to a long term long position,I'd just like to get a pullback/better entry that allows us to confirm with the kind of long signal we got (above) on the initial long trade.
I may consider a DUST or GDX pullback trade, but it would really have to look great and I really don't see that happening right now.
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