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We Never Said It Was Easy! - April 4, 2012
This is one of the most challenging trades that’s going on with GDX. But it’s no time to become emotional and improvise. The rules of the EOD robot model are our best safeguards for staying on the right side of probabilities.
The EOD GDX robot is still holding its long position. If the initial stop of 47.94 is hit today, that will be it and we’ll concede a maximal pain loss that was accepted before entering the position.
The porosity for the PM Money Flow is raised to 0.119% for today. A daily close below -0.119% will trigger an exit and reverse to short signal at the open tomorrow.
The “advised” secondary entry at a limit of 47.27 is far below our initial stop (47.94). Make sure that you enter that secondary stake only if the RT Money Flow is above the -0.119% protection level.
The RT model is short. It will cover and turn long intraday if the RT MF hits 0% + 0.119% (positive porosity).
As I reminded yesterday, holiday-shortened weeks tend to produce faster moves than usual and both Monday and Tuesday were good illustrations of the phenomenon. The release of the Fed minutes Tuesday was received with panic selling but the last trading hour looked like hasty institutional accumulation with the PM Money Flow rising from a bottom of – 0.46% at 3:00 pm to a close of -0.06% avoiding an EOD sell signal. Such precipitous moves can repeat in any direction today and tomorrow and it is difficult to make any bets before the closing bell has rung.
GDX is now back in the lower end of its 3-week trading range and right in the middle of neutral floor clusters that can hardly help giving any clues.
Billy
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