Taking a look at the daily chart of GDX, let’s note a few things. The daily chart is becoming overbought. Recall that we recently noted the monthly charts are quite overbought but daily and weekly charts were not. Overbought, does not = bearish in any sort of way. But…
I find it interesting that the entire up-leg since the last test of the 50 day moving average has been gap-free. Well, if pre-market holds its stance for another hour, GDX is going to put in a fat gap up. May mean little in the short-term. But it may also mean “gap & trap” prior to a reversal.
I covered my partial hedge this morning, but remain ready to re-take it. I’ve been displaying the characteristics of a casino patron rather than an Old Turkey * style investor (hedging actually helps me hold positions in a bull market like Old Turkey), and will probably continue to do so where hedging my miner positions is concerned.
But now that we are through the holiday and Trump is getting tariffs thrown back in his face, things are getting dynamic. Time to pay attention. So when I see something like this gap up, I note it. Please factor or ignore it as you will.
* A memorable character from Reminiscences Of A Stock Operator.
