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With reference to yesterday’s update on GDX, the ETF is still sitting below resistance and it is the weekend of a week that included a fair amount of noise, including geopolitical noise (not at all a fundamental consideration for gold). Add in the emotion of a drop and ‘V’ bounce by GDX off the daily SMA 200 and the FOMOs that likely jumped on and I am considering hedging (at least partially) gold stock positions over the weekend. The gains since the November 14 low have been good, and not just from gold stocks. I am back in preservation mode in the very short-term.

Sentimentrader’s short-term risk profile for gold has jumped back to over-bullish.

Meanwhile, from yesterday’s update:

The gold stock sector is bouncing after holding a key level at the uptrending daily SMA 200 (orange) and the former downtrend channel’s top. A subscriber mentions the potential of a ‘C’ leg down, and that is a technical possibility. If that were to come about we’d look as low as 32, as a ‘C’ or final washout leg is usually a strong one.

But this chart shows the mid-38s as a short-term resistance area that, if overcome, would set up a test of the underside of the SMA 50 (blue). The SMA 50 at around 40 (+/-) is the proving ground. Any rise above there opens up the probability of new rally highs and our target of HUI 375+ per bigger picture charts.

Personally, I am holding (aside from company-specific considerations) and will hedge if needed. Watch current resistance and the 39 area and then the SMA 50 around 40.

If the day ends in the current status, GDX would still be below that initial resistance. Of course the 50 day average is still open as a possibility before any reaction comes about. But that is the point of hedging, rather than bearish day trading, which I don’t care for, personally. Hedging theoretically means you don’t lose (to the extent you hedge) and after quick gains that is exactly what I want… not to lose them, even if just on paper. Of course, additional short-term gains would be off the table as well.

This has been a good week, but gold stocks are just one of several areas that bulled. Nothing unique going on yet. The correction is not definitively indicated to be over. Otherwise, the intermediate picture remains bullish. Traders trade, longer-term holders do what they do (trade some, hedge, add the pullbacks, etc.). I am going to hedge into the weekend to some degree and hold most/all positions, as noted in yesterday’s update.