GDX corrected yesterday from it's top above 54, and at least for today has lost its green bar status on the Elder Impulse chart. Remember, it takes both a positive MACD histogram slope and price above the 13 day EMA (magenta line) to indicate a green bar. Blue will result if one of those indicators remains bullish and the other does not. Red results when both flip over, negative histogram slope and price below the 13 day EMA. Blue suggests exit from all long exposure. I anticipated this early in the session on relative price strength because of the lofty RSI readings, and sold covered calls locking in 54.60 with the Jun 51 contract. I would be inclined to buy back the calls if price sank into the gap at 51. The mining stocks still are correlating with the overall stock market, albeit less than we have seen for the last year or so. I definitely see weakness in the broad market, therefore the caution regarding the miners.
95% of all gaps are later "filled" by future price action, meaning prices are likely to fall into the gap zone. A strong break away move often exhibits a predictable gap structure where 3 gaps are present. The first is associated with the initial breakout that starts the trend. A 2nd gap will often show up mid-way through the eventual totality of the up trend. The final cap comes as a speculative blow off at a local top. Many times this leaves a single and isolated price bar or candle with a small body (abandoned baby) or one with a long upper wick structure and a very small body located at the bottom of a the candle (gravestone). The odds favor a pull back into both of these gaps, certainly the 2nd gap in the near term. The first gap may take some time to fill by virtue of how far back it is and how strong gold and silver is of late.
Daily: "
via
No comments:
Post a Comment