NFTRH+; GDX Daily Chart Management

Back to the GDX daily chart for some micromanagement of the gold stock correction. With GDX nesting on the SMA 200 yesterday and per the trade log, I released my hedge (DUST) on the miners yesterday. A typical gold stock correction will test our very souls, which could also take the form of a test of the March low. But I was not willing to chance losing the hedge’s profit while holding it against a sector with positive risk/reward.

Yesterday’s hint and today’s potential (it’s a long day) follow through come during what will be a noisy week, with June CPI on Wednesday and earnings season lifting off. But going by the daily chart here is what I see (while tuning out all other considerations like economic data, Fed jawbones, media and even the macro fundamentals, for now).

  • SMA 200 was hit, bounced, hit again and that qualifies as a solid test from which the next rally could manifest.
  • The sub-28 gap, which could have been a ‘breakaway gap’ is still open (I’d have preferred it closed).
  • The intermediate uptrend from Q4, 2022 is fully intact above the March low.
  • There was a small positive divergence to the new lows made in June, by RSI.
  • MACD, while negative, is triggering up again.
  • Overall, as it stands now that is an impressive looking correction from the May high. Almost too perfect looking, which is why I mind the gap.
  • With so much of the correction already behind us (assuming it would remain normal at a higher low to March) I want to be careful about hedging, but also careful about adding too many positions too soon. I’ll hold what I have unless something gets off the hook of the current plan.
  • Which leads me to another point. If the gold miners do rally and it comes with inflation trades and other items going anti-USD, the miners, while bullish, would be nothing special. Remember, the ultimate big picture goal, one on which I have no particular timing, is for a real bull market amid deflationary pressure as the counter-cyclical sector sports its unique aspects. The post-bubble contraction playbook per Bob Hoye, that never seems to arrive. Squirrel find nut? Some day he has to.
gdx gold miners ETF