GDX Golden Cross: a price paid

Another Golden Cross, another heartbreak and a price paid by believers in this TA novelty

It usually, if not always, goes this way. As noted on January 24, the Golden Cross that showed up in the Bug-o-sphere has resolved as it would have and probably should have. For the same reason that support/resistance and especially trend line breakouts and breakdowns are often false (USD most recently negated a false breakdown), so too is the bullish implication of a “Golden Cross” and the bearish one of a “Death Cross”.

TAs are trend followers, if nothing else. I am a trend follower because I respect the trends. But when dialed in to closer time frames, a novel event like the cross of the 50 day average above the 200 day average is more of a trigger… first to suck naive investors in based solely on hype and then to punish them mercilessly for following the signal.

Until yesterday’s reversal I still had one upside arrow on this chart to go with the two downside ones. A post-cross correction was coming, but it did not confirm until today (I added a hedge on the miners I held yesterday, honestly with no real hopes for its success as I’d already had a few false starts in that regard). From yesterday’s Trade Log…

We’ll now manage the correction in NFTRH with a low pulse rate and a greedy orientation. But this chart pretty much says it all. Nothing has happened that was not supposed to happen. It’s healthy. What’s unhealthy is any griping and excuse making you may come across. Some friendly advise? If you see any gold bug influencers out there crying foul… for crying out loud, tune them out!

GDX daily chart

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This Post Has 5 Comments

  1. Eric

    Hey Gary, what do you think of the “Golden Cross” happening with the SPX today? Maybe take a week or two to play out like the GDX? Maybe watch the financial talk and see if they talk it up and suck people in? Eric

    1. Gary

      I’ll go over it in this weekend’s report, Eric. But you know how I feel about these things. It’s not specific to any sector (just that gold bugs complain and make up ghost stories louder than the rest) but it is 100% on plan to SPX, the broad market and the 2023 view (which is ultimately not positive).

      It’s just a baby cross now, probably not even touted much yet in the media. But same rule will apply. the other thing is sentiment, which as of yesterday saw Dumb Money way too bullish. That’ll be in NFTRH 743 as well.

  2. Eric

    Yep… here’s the headline… “Cartel Traumatizes Gold/Silver.”

    1. Gary

      Good one!

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