Tuesday, October 18, 2016

Gold Starts To Break Out

A breakout in gold miners is starting after a week of chopping around.

Gold metal appears to also be breaking out of its range between 1250 and 1260.

We suggest that the gold miners etf GDX may follow through, possibly targeting the open gap above and upper channel line.

Let's see what happens.

Tuesday, October 4, 2016

Gold Correction Nearly Over

Gold miners suffered major capitulatory selling today with no apparent trigger causing the sell off. Interestingly, Chinese buyers are on holiday this week so liquidity is thinner than average.

The large volume suggests that selling is near exhaustion.

We surmise that a reversal is in order within the next day or two.  

Some additional downside over time is possible down to the 200 day MA or even the 50% fib retracement.

Our view remains that the stronger gold stocks after this sell off should be placed on a watch list for purchase in the coming weeks.

We annotated a downtrend channel to watch should the stocks begin a reversal tomorrow or Thursday.

Tuesday, September 20, 2016

Gold Miners Correction Continues - Where Does It Stop?

Gold and gold miners have sold off significantly over the past six weeks.

With the Bank of Japan and FOMC decisions immient, we need to prepare for the next move.

A dovish BOJ may embolden the Fed to raise rates this month.  This is a secondary premise.

The primary one is the BOJ does very little and the Fed puts off a rate hike for another few months.

Our estimate of market reaction is a relief rally for miners followed by more choppy price action once the announcement is made.

Any strong pullback in gold or miners is likely to be bought and is a buying opportunity in our view.