The miners followed the GC contract higher pre-market on Friday. The GC contract held most of its gains during the day, but the miners diverged from the GC contract during regular trading hours and followed the indexes down. The miners generally move independently of the indexes. This price action may have given us a decent long entry for Monday.
In this particular chart I have pushed the stochastics to triple the time frame to give a better long or short trading direction.
The 18 and 45 MA on the 30 minute chart is giving a very good crossover signal for swing trading. You can at least use the MA crossover for taking profits and going flat. My advice not to be short the miners overnight last week was based on the MA crossover and dynamic world events.
I have no positions in the miners at the moment. My bias it to the upside for next week. Do not be short the miners overnight next week if you want to sleep well.
Comments and opposing views are welcome. I will share a few sites if anyone shows some interest.
If QE buys up equities, then you should just as well be able to buy equities, because you are putting your money into the same market where the price is rising. The figures at this site http://www.federalreserve.gov/releases/z1/current/accessible/b100e.htm show the assets of the Fed. Don't you want to be in the market that is being pumped up with trillions of dollars? The price of your assets will be rising due to all of the buying, even if all the extra dollars are diluting the general economy.
Our trading edge is knowing which way gold is trending, and why. GDX is not to be traded as an equity, more as a future, tracking gold.
But if we end QE, the economy will not be propped up by the Fed. In my mind, this would remove support in equities markets, making it a riskier investment. Therefore, it would still be a good idea to invest in gold. However, instead of the price of gold rising when Bernanke started talking about ending QE, it fell.
The Gold market had been waiting for a pullback. Brenanke's statements of tapering QE ended the Bull market for Gold.
I would not deter an individual from having physical gold in their portfolio just in case the rapture comes. But that has nothing to do with trading.
Gold is up 3$ aftermarket. Do not be short GDX this week,especially overnight.