The Battle for Investment Survival

Late Vice Chairman, E.F. Hutton, Gerald M. Loeb

‘Opportunities Are Rare’

… And when you find one, you must use it to its maximum extent.’

That was the admonition from Gerald M. Loeb, in the above titled book.

It’s the exact opposite of ‘diversification’. The professional traders/speculators know this and so focus on a few or just one opportunity.

The months-long bullish hysteria in the gold market, gave an advance clue it might be a significant opportunity; the opportunity for a low-risk trade opposite the crowd (not advice, not a recommendation).

So far, that’s correct.

The gold bulls are trapped. Such events can go on much longer than anyone expects.

With that said, we’re focused exclusively on this market until it falls apart, we exit, or there’s another opportunity.

Now, on to the Senior Miners, GDX

GDX

We’ll get straight to the marked-up chart.

Looking at price action on a closing basis, the past four trading days were a test. The print high was on Tuesday (31.58) and the close high was yesterday (31.49).

The test was on underside resistance and looking at the chart, that underside was also an axis line.

Next, we see at least one trading channel with the possibility of an extension to other channel lines.

If these other channel lines are in-effect … meaning we’re really in the wider channel(s) but it’s not yet verified, that represents some serious downside potential.

Positioning

The past three trading sessions allowed the opportunity to increase the short position via DUST (not advice, not a recommendation).

A previous post said that positioning was essentially complete. However, the market kept providing opportunity to go short.

Market action directs trading action. The total size (via DUST) was increased by about 8.7% (not advice, not a recommendation).

Stay Tuned

Charts by StockCharts

Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.

The Danger Point®, trade mark: No. 6,505,279

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