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.
‘They [The Fed] are totally tricking the markets’ (time stamp 3:30), link here.
Yes, it’s a real chess game going on and the other side, makes up the rules.
This update presents that despite all the manipulation and head-fakes, significant market pivots in the miners were identified (correctly) with Wyckoff analysis.
That analysis, in turn, helped develop a long-term strategy (not advice, not a recommendation).
Junior Miners GDXJ, Weekly Close
Three key points are shown on the chart.
The first goes all the way back to October of 2020, link here. There’s something wrong with the miners.
Potential for another downward pivot, link here, was identified to-the-week, if not, to-the-day.
The subsequent move printed the most impulsive price action since the spike melt-down of early 2020.
Which brings us to today.
Another potential pivot has been identified, link here.
As of this post (11:20 a.m., EST) the Juniors GDXJ, continue to rachet lower.
The Long Term
As Ed Dowd points out in this interview, what’s happening now will affect us all for decades, if not centuries to come.
Therefore, it’s a good idea to have a long-term strategy.
From the above chart, it’s clear that Wyckoff analysis has been on the correct side of GDXJ price action; the bearish side (not advice, not a recommendation).
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.
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.
A military coup in Niger results in gold shipment suspension.
Correspondingly, the mining sector along with gold and silver, are higher.
The real question is, will gold, silver, and the miners continue upward or is this just an excuse to force out the weak (short-positioned) hands?
If we look at the facts, such as Niger’s gold output compared to the rest of the world, it’s miniscule; hardly a blip and production is decreasing.
Add in, the mining sector has not been in a bull market for years, and we’ll surmise, the current move higher has low probability of continuing (not advice, not a recommendation).
For today’s session (as of 3:11 p.m., EST), price action has effectively been slammed into resistance as shown.
Junior Gold Miners GDXJ, Daily
For positioning short (via JDST) this is potentially a low-risk area (not advice, not a recommendation).
There would need to be continued demand for a move higher past the resistance area (blue line).
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.
‘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).
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.
It’s rare to get a ‘textbook’ signal … but every now and then, it does happen.
The last update on the Junior Miners, GDXJ, said a short position in the sector was re-established.
Today’s trading action may be straightforward; we either get stopped-out, or the market gives the signal to enter a full (sized) position (not advice, not a recommendation).
The bearish case for the miners has already been established many times over. Recent posts are here, here, here and here.
Since we’re looking at the sector from the short side, we’ll use the chart for the leveraged inverse fund JDST.
Junior Miners, Leveraged Inverse JDST, Daily
As said at the top, it’s (potentially) straightforward.
If JDST, price action exceeds 6.81, a full position will be entered with hard stop at this session’s low (determined at the close of the day).
If price action declines to 6.37, or lower, the existing (small) position is closed out.
Closer in, with a zoom of the price action.
As of this post (8:41 a.m., EST) JDST is trading in the pre-market slightly higher at, 6.65 which is + 0.08, or + 1.22%.
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.
With today’s outside-down (as of 2:43 p.m., EST), that makes it two key reversals for GDXJ, in the past five trading days.
While it looks like the whole herd is focused on the new mania, Artificial Intelligence, back at the ranch, the miners are painting an ominous picture.
Rendezvous With Destiny
The first two-minutes and ten seconds, at this link, are all that’s needed to get the idea of what’s likely to come.
The market recovered (fairly quickly) from 1987 … this time, may indeed be different.
The Elephant Sleeps
Ah, yes. The elephant no one talks about … or more accurately, are afraid to talk about.
Three links here, here and here, show us the elephant may be about to awake.
From the bottom, May 25th to now, is a Fibonacci 13-Days.
Is that important?
Here’s a prior analysis on Real Estate IYR, that shows how Fibonacci can identify the pivot point, trend and/or trading channel.
Now, back to the Juniors.
The mining sector appears to be under pressure. Each attempt to rally is being thwarted.
Compressed view of the channel, below.
The Fed announcement at 2:00 p.m., EST tomorrow, may or may not have any material effect. The sector may just continue lower …. slowly, without much fanfare (not advice, not a recommendation).
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.
Early in today’s session, the Junior Miners GDXJ, posted a new daily low and new weekly low. That helps the downside probabilities (not advice, not a recommendation).
As mentioned in the prior update, when price action penetrates existing lows, there’s a good chance of ‘spring’ action as a result. The market attempts to rally.
Sometimes it’s successful; other times, not.
The attempt to rally after posting new lows is what GDXJ is doing now (as of 2:15 p.m., EST).
Junior Gold Miners GDXJ, Weekly Bar
In the weekly chart below, note how the close, then open, then close and then open again, are to each other.
That ‘narrowness’ signifies either resistance or support, in this case, resistance.
Where the sector closes for the day may an important clue if we’ll continue to the downside.
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.
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.
With less than an hour into the session, Junior Miners (GDXJ), have tapped upper resistance, pushed past by just 0.07-points, and are now eroding to the downside.
If the index continues lower, it has the classic near textbook look of ‘bump and run’.
It’s a price action response to stops placed just above resistance that get executed and then the market continues lower.
If that’s the case, it could get very serious to the downside (not advice, not a recommendation)
Short positions via JDST, have been maintained with a hard stop at today’s JDST, low of 5.974 (not advice, not a recommendation).
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® 