Tuesday, 8 March 2016

2pm update - the indirect signal

Regardless of today's close, there is notable weakness in the precious metals, with Gold -$3, and Silver -1.4% . The related mining stocks are naturally on the slide, with the ETF of GDX -3.4% in the $19.70s. A retrace was long overdue.. and appears underway.

GLD, daily2

GDX, daily2


The point is this...

I am looking for Gold and the miners to retrace... into the next FOMC.

Keeping in mind the recent bullish upside break, there seems high threat that Gold - and the related mining stocks will see hyper upside - as the broader market looks on track to implode this spring/early summer.

Yours truly would feel a hell of a lot more comfortable launching index shorts/VIX long... (along with GLD-long, and GDX-long), once GLD/GDX have seen at least some sig' retrace into next Wednesday.

So.. for now.. I'm seeking to use the next floor in GLD/GDX as an indirect signal that equities have maxed out.

Near term downside targets... GLD 115/113,  with GDX 18.00/17.50

From there... basic upside.. GLD 125 (Gold $1300), with GDX $24/25.

'Hyper upside' targets would be GLD 150 (Gold $1550), with GDX $40.. by June/July.

Considering the break of the multi-year down trend... the hyper targets are valid.

Any thoughts?