I wrote about a possible bottom in gold back in mid-October (click here), but for the most part the trades I put on back then did not work-out. No biggie as I was legging into that possible trade set-up and the amounts were in reality, insignificant.
I have started some new trades in NUGT and HGU (TSX Canadian exchange for my retirement accounts) today as I am thinking that maybe, just maybe, the US dollar, gold and the gold miners are ready to start moving. Here is my view of the charts …
Gold basically trades in sync with the US$ strength – the weaker the US$ the stronger, gold priced in US$ is. My bigger price structure read of the US$ has been pretty bang on and I think that the US$ is about to begin the final wave 3 move down into support here soon (possibly now). UUP is trading right at $24.35 as I write this and the daily ATR support is at that same $24.35 level.
US$ Bull ETF – Daily Chart#2
A closer look at the daily price action and the chart indicators has me thinking that the US$ is about to make a move lower. Next week is Thanksgiving week in the US so maybe that has Fx traders on hold, but it sure looks ready to begin heading lower.
Gold ETF (GLD) – Daily Chart
The Gold ETF is also in my eyes making a 3-wave move higher off of the late-2016 important pivot low. Wave 2 stopped right at the text book 1.618x price extension target drawn off of the first wave move. The 3rd wave typically will push to at least the 1.272x price extension target drawn off of wave 2 … that implies that GLD will head to at least $130.88 on this expansion move higher.
What does that mean for Gold Miners (GDX) and the 3x leveraged NUGT/DUST ETFs?
Gold Miner ETF (GDX) – Weekly Chart
If you look at the bigger price structure of the gold miners over 2017, then you can see that GDX has severely underperformed the gold commodity. But that underperformance could play catch-up if gold itself starts to make a bigger move and institutional money starts chasing gold miners.
Gold Miner ETF (GDX) – Daily Chart #1
Gold Miner ETF (GDX) – Daily Chart #2
When measured against the SPY ETF, gold miners have been a big laggard … that may play into long traders here though going forward as money starts to flow back into the sector. You can see that here in November, the Time Segmented Volume indicator crossed back above its signal line and I will be watching to see if we can get a bullish volume confirmation and see the TSV cross above the zero line soon.
3x Leveraged Bullish Gold Miner ETF (NUGT) – 10 Vision Renko Chart
Broadening price patterns typically require a break and then a confirmation series of moves (i.e., consolidation around that break level), so the break today may just lead to consolidation around current levels all of next week (which is also a holiday trading week).
3x Leveraged Bearish Gold Miner ETF (DUST) – Daily Chart
I have started my positions in NUGT (long stock) and DUST (long January 2018 ATM puts), and I will be looking to trade NUGT and DUST more aggressively intra-day starting next week. I want to get into the last week of November before I start building any swing trade position materially.
Gold could have made a short-term top today …
Gold Futures – 10 Vision Renko Chart
The dark blue “extreme” trend strength warning candles will hopefully lead to a controlled consolidation/pullback over the holiday period next week and then price will be ready to get moving higher once late-November arrives. A squeeze into 2018 would be great … important pivots are often made late in the calendar year for gold.
Silver ETF (SLV) – Weekly Chart
Bottom Line – rotation from sector-to-sector has been key in 2017, as the overall market grinds higher. Gold/silver/miners may have their day in the sun soon here if I am reading the charts correctly. This weekend I will go over my list of gold and silver miners to see if there are any stocks that look like they are leading the charge higher.
Cheers … Leaf_West