The case for GDXJ explosive summer move
I will share my thoughts.
I´m fully invested in gold stocks. My chart indicators "tell" me.
- Daily charts have corrected and also is expected a rising in stocks next weeks. I expect that we finally reach and surpass the 48-50 level. About a 10% rise from today levels.
- A daily full stochastic is "telling me" that we are in course of a correction (that´s true, specially for the HUI index, which has been more dynamic than GDXJ so far.) But there is always a rebound which is beginning and will resume next week.
- Previous legs like that reached at least the previous top of even a 8% higher. Then the correction resumed some more time.
- If the trend is strong, this correction could not happen so soon.
So considering all this i would expect a one week two weeks uptrend following by a correction, but without going through current levels of prices.
In a more bullish case
- Weekly gold stocks relative to bullion are oversold as they where in previous bottoms. So it could be expected several weeks of rising. That is also true for HUI, XAU, GDX.
- Gold stocks are surging from a multiyear bottom, so they are eventually gaining strength.
- Many times before gold and gold stock made and extreme move just to get momentum to do the opposite. The rised fast before a sharp drop or viceversa. My believe is that´s the case right now, with March drop.
So, in all this "is true",and comparing last year with today, and if gold rises...rich is happening... then we could reach at the end of July or beginning of August a higher lever for GDXJ (lest say 65...or something). Well, that is a 50% increse from todays levels.
Anyway, remember. Nothing drops faster that a gold stock. Nothing. (I think Einstein missed this point in the General Relativity Theory)
I´m fully invested in gold stocks. My chart indicators "tell" me.
- Daily charts have corrected and also is expected a rising in stocks next weeks. I expect that we finally reach and surpass the 48-50 level. About a 10% rise from today levels.
- A daily full stochastic is "telling me" that we are in course of a correction (that´s true, specially for the HUI index, which has been more dynamic than GDXJ so far.) But there is always a rebound which is beginning and will resume next week.
- Previous legs like that reached at least the previous top of even a 8% higher. Then the correction resumed some more time.
- If the trend is strong, this correction could not happen so soon.
So considering all this i would expect a one week two weeks uptrend following by a correction, but without going through current levels of prices.
In a more bullish case
- Weekly gold stocks relative to bullion are oversold as they where in previous bottoms. So it could be expected several weeks of rising. That is also true for HUI, XAU, GDX.
- Gold stocks are surging from a multiyear bottom, so they are eventually gaining strength.
- Many times before gold and gold stock made and extreme move just to get momentum to do the opposite. The rised fast before a sharp drop or viceversa. My believe is that´s the case right now, with March drop.
So, in all this "is true",and comparing last year with today, and if gold rises...rich is happening... then we could reach at the end of July or beginning of August a higher lever for GDXJ (lest say 65...or something). Well, that is a 50% increse from todays levels.
Anyway, remember. Nothing drops faster that a gold stock. Nothing. (I think Einstein missed this point in the General Relativity Theory)
Comment:
I´ll take some prudence. On my view there is a possible top in the GDXJ today/tomorrow. It could drop and resume upwards or correct more. I´ll take some positions out today and almost for sure the rest tomorrow. Then wait and see.
Trade active:
Gold is weak. I would not bet for The Bullish case for the Gold Stocks. The "Daily Correction" has more strength. Since yesterday I´m also taking positions in JDST. Shorting the index. Holding them, I expect no longer than a week. Let´s see.
Trade active:
I was wrong.... This is going on, and there is no resistance from 54 to 65 level, that would fit with gold to 1950 or so at the end of August.
Comment:
still going on. It could go above 66 $, close to 70 $ next week. That means gold up 2.000 $. incredible.
Trade closed: target reached:
It seems we have reached the top for this move. We can see some movement like the one in June 2019, which means some fall and then a new raise, making some double top before more consolidation. Or we could simple correct in a new way, for some weeks setting the sector for a new leg up latter in autumn, winter.