I’ve done another update to the gold trade from Trade Followers we posted in early January. Here is the current situation for gold stocks (GDX). Below is the chart associated with the new post. It’ll soon be time to add more to the position or close the trade. It’s make or break time.
I did a write up on Trade Followers about a buy signal for gold stocks generated from Twitter momentum / sentiment. It’s time to watch the trade closely for signs that it might turn into a long term trend change for gold and gold stocks (GDX). Here’s the associated chart…as a teaser. In addition, there are some interesting things happening with small cap stocks (RUT) and the NASDAQ 100 (NDX) that will likely tell us which way the market will break. Those two indexes will likely tell the tale. The short story is if sentiment for RUT breaks lower the market will likely follow. If sentiment for NDX breaks higher then odds favor new all time highs. Here’s a link to the post.
I did an update on gold (GLD) and gold stocks (GDX) at Trade Followers today. Things aren’t looking good. Here’s the chart that went with the post.
If you’re interested in the Twitter and StockTwits indicators, I’ve posted this week’s charts at Trade Followers. Here’s an example of the Gold Miner’s ETF (GDX) creating a long setup.
The sell signal issued for Gold (GLD) on 3/19/14 from quantified StockTwits messages has ended. The downtrend line in quantified messages has finally be broken to the upside. Unfortunately for gold bulls it didn’t happen after a strong positive divergence with price. As a result, the sell signal is merely closed rather than flipping to a buy signal. For aggressive traders who believe in GLD there are other factors that might warrant a tightly controlled long trade. Notice that GLD had a strong volume washout in June of 2013. Then a double bottom in December 2013 on lower volume near the 114 level. That was followed by a very strong rally up to the descending trend line that has been in place since the peak in late 2012. It is logical for the ETF to be turned back at that trend line again, but since the double bottom has held for nearly six months the odds are increased that any retest of the 114 area will hold. So a long
The counter trend bounce signal issued for Randgold Resources on 10/20/13 has ended as of last Friday. As I mentioned in the initial post, price traded higher after the signal, but was a failure (loss of -1.37%) from the bounce signal to closing it last Friday. Sentiment is still running high for the precious metals even though price continues to make new lows.
For all you precious metals fans, sorry I missed a counter trend bounce signal for the iShares Silver Trust (SLV) on 10/16/13. I saw it on Friday (10/18/13) so the chart is marked as such. Sentiment for Randgold Resources (GOLD) issued a counter trend bounce signal at the close on Friday (10/18/13). Sentiment generated from the Twitter stream has painted a positive divergence with price as it made a lower low and has subsequently broken the down trend line that was confirming the move into the last low. The fact that both SLV and GLD are issuing counter trend bounce signals adds a bit of weight to the possibility for a bounce in the entire precious metals space. As you know I don’t like to trade stocks in a down trend. For those of you that do please be aware of one thing. Although the counter trend bounce signals in the precious metals have almost always seen higher prices after the signal. Most of them were failures over the course
A couple of weeks ago I posted charts of precious metals with their Twitter sentiment indicators. In that post I concluded that “precious metals need a bounce right here or we’re probably seeing the resumption of the longer term down trend.” Gold and gold stocks didn’t get the bounce and subsequently broke back below their 50 day moving averages. This increases the odds that a continuation of the down trend is underway. There is a silver lining though. Sentiment hasn’t broken down too badly with price. Although the SPDR Gold Shares ETF (GLD) smoothed sentiment broke its uptrend line, it has turned back up at a point that is still confirming the move out of the June lows. This puts GLD back in a position that it once again needs to bounce right here. Market Vectors Gold Miner Shares ETF (GDX) has a much healthier chart and sentiment pattern. GDX is still holding its uptrend line for price that started with the June lows. Smoothed sentiment barely dipped below its
During the rally out of the late June low the gold ETF I track (GLD) has had confirmation from sentiment generated from the Twitter stream. Smoothed sentiment has had a good uptrend that has held on dips. It’s currently coming back to the trend line and attempting to turn up even as price has fallen over the past few days. This is a good sign, but GLD needs to bounce right here or there will be a high probability for a resumption of the down trend. Another factor that may bring heavy selling if a bounce doesn’t materialize is that GLD is sitting right on its 50 day exponential moving average. A break below that level will almost certainly trigger some stops. The gold shares ETF that I track (GDX) has a stronger sentiment pattern than GLD. Smoothed sentiment had a large positive divergence from the hard break down in price in April to the break down in June. Since that time sentiment has held its upward sloping (and confirming)
A quick update on precious metals today. We didn’t get a counter trend bounce signal from Twitter sentiment for any of the precious metals before the current rally. This was because we didn’t see good positive divergences from price before the move started. Now that the metals are rallying we’re seeing confirmation of the move from Twitter sentiment that is painting higher lows and higher highs. Sentiment isn’t extremely over extended yet, but is getting near levels that might suggest a pull back is necessary before the metals can move higher. Below are charts of GLD, GDX, and Randgold Resources (GOLD). Notice that sentiment for Randgold is starting to paint a negative divergence from price as it nears the underside of the 200 day moving average. This is another indication that a pull back in precious metals may occur. A break of the uptrend in smoothed sentiment for Randgold would create an official sell signal for the stock (or consolidation warning if you believe it is in an uptrend). I’ll
Market Risk Rising
Volatility Hedged Portfolio