Ambiguous GDX - March 15, 2012

We have an ambiguous situation with GDX. Because the PM Money Flow exceeded its oversold level (-1.45%) intraday but closed above it EOD (-1.31%), the GDX robot is holding its short position while RT traders have covered their shorts and reversed to a long trade. Pascal has just published a GDX robot comment about the various scenarios that we can envision from here.

In fact GDX had its selloff that we expected out of the bear flag and crossed what I labeled as the “capitulation” target at Monthly S2 (50.09). Interestingly, GDX was at 50.13 when the RT buy signal from oversold was triggered intraday. The final hour of trading saw aggressive buying by large players and GDX finally closed 1 cent away from the trigger price (50.12)!

Total cluster strengths are now neutral at a 11:11 support/resistance ratio, bounded by Monthly S1 (52.75) on the upside and Monthly S3 (47.50) to the downside. This is suggesting at least some consolidation at present levels and the robot will patiently wait for a valid EOD signal. The worst-case trailing stop (53.16) is now well below the entry price (54.34), guaranteeing a winning trade whatever happens.

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IWM at its low retraced down to yesterday’s daily S1 which is a normal bull market dip after a strong Fed Day. It happened with moderate 20 DMF outflow at 0.37% still well above the former porosity stop level. Total cluster strengths are increasingly in favor of the bulls with a 22:14 support/resistance ratio. But the ST/LT edges expected 3D gain is -0.01% from the previous day's close, with a win ratio of 55.06%. That’s why there is no advised setup for IWM.
Billy

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