From the August 10th update, we discussed a bounce a coming bounce in GDX as a short/hedge opportunity for those who would short (I’d had multiple emails asking about shorting or hedging).
But as an example of a setup for those who would hedge, GDX provides one. Last week a big gap down was created. If you want to short a setup then a fill of that gap at 34 could do the trick. Or better yet the converged and down-turned moving averages (35+).
It would also be advisable to have a stop loss in mind, which could be if GDX were to take out last week’s high above the moving averages. Oh and look, there is another gap up there near 37! So that could be a bounce/short setup objective as well. But above the moving averages would also put the downside correction in question. There are other gaps around 39.50 and around 42. Those could fill in the future if/when the sector proves to have been on a shakeout prior to the next big picture leg up.
Here is the updated chart. As noted in that update I am not even considering shorting anything unless there is a vigorous bounce to a logical termination point (assuming that the fundamentals have not started to turn positive as such time).
GDX is in a short-term cluster on the daily chart that seems to have its eyes set on filling the gap and the first bounce objective of 35+. I’ve marked up the chart with the 3 gaps and the ultimate objective above 40 to confirm a resumption of the bull. Boy, that’s a long way away. So like the metals, the miner ETFs and indexes are ‘bounce only’ technically at this point.