‘Straightforward’ … Sort Of

‘Real (market) opportunities are rare. When one is found, it must be used to its fullest extent’; Gerald M. Loeb, the late, and former Vice Chairman, of E.F. Hutton

What a refreshing quote that is, back in the day when we had ‘Chairmen.’.

So, are the Miners the Juniors GDXJ, that opportunity?

From a technical standpoint, there’s the bearish divergence on MACD when looking at the weekly. Then, we have Fibonacci correlation on the weekly as well (shown below).

The daily has the short entry signal given yesterday (not advice, not a recommendation).

Fundamentals Collapse

Next, we have industrial demand in collapse, not to mention the world economies. If industrial demand is collapsing for photovoltaic components (link here), then silver demand must be collapsing.

The ‘Gap’

The analysis was working fine in the pre-market for shorting the GDXJ (not advice, not a recommendation), but then at the open, there was the gap.

Let’s address that but first get started with the weekly chart of GDXJ

Junior Miners, GDXJ, Weekly

The technical details are clear: Bearish divergence on MACD as well as Fibonacci time correlation.

The original Fibonacci 89-weeks was covered in this post.

Yesterday, there was a gap-lower open and price action kept posting lower.

Will this gap be filled? That’s the question.

Junior Miners GDXJ, Daily

As the chart implies, was yesterday a breakaway gap?

Price action’s right at support … or slightly below, which technically put us in Wyckoff ‘spring’ position.

The ‘Probabilities’

Given the bearish overall condition of this sector both on a technical and fundamental basis, a gap-fill is unlikely … but one has to be prepared.

As stated in the last update, the short position via leveraged inverse JDST was increased (not advice, not a recommendation).

To account for possible gap closure on the inverse JDST, a soft stop (trader discretion) is at 6.80 and below, with an absolute hard stop (no excuses exit) at 6.38 (not advice, not a recommendation).

It’s now, 20-minutes before the open.

Let’s see what happens next.

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