Holding Long Positions - May 29, 2012

All edges from the IWM robot are supporting long positions and today’s entry limit is set at 76.18. The trailing stop of the initial position is raised to 74.12. There is very little multi-pivot resistance up to the 50-day moving average (80.26) and a very strong support cluster just below Friday’s close. The ATR % is also falling significantly which favors the start of a new uptrend.

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GDX is still showing an impressive technical reversal to the upside and an important bottom of 5/16 is now confirmed for the intermediate term. It’s too risky to chase and buy new positions before a pullback . A new long position will then only be safely executed in the absence of a sell signal from the GDX model. Such a signal would be a hit of the 1.35% on the Precious Metals Money Flow.

On the chart below, we can see that the dual former resistance of Yearly-Semester S1 (44.77) did only create a dip and was changed into support at the close. But the confluence of Quarterly S1 (45.75) and the 50-day moving average (45.98) is looming within one day’s ATR reach and will potentially offer the trigger for a pullback from extremely overbought short-term conditions. With Friday’s strong close, I am less tempted to exit and my view is to hold existing long positions and trail my discretionary stop to a daily close below the new Weekly pivot (43.83) which is the area of the dip from the initial YS1/SS1 test.
Billy
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