A Balanced Outlook - February 22, 2012

The GDX MF was impressively strong yesterday and it would take about only half of Tuesday’s GDX MF advance around the 1.30% level +/- adaptive porosity allowances to enter a protective countdown for selling into strength. Another positive clue is the very tamed volatility with an ATR hovering around 2.5%, quite an average of previous successful rallies of GDX.

If MF weakens instead, the robot will hold into any pullback as a short signal is now statistically 3.6 days away, but it found no edges for entering new secondary positions today. The trailing stop was raised to 52.35.

The first support and resistance clusters are now much more balanced with a ratio of 19 to 25. A close 6 cents above yesterday’s close at the dual Yearly and Semester pivots (55.88) remains a prerequisite for maximal floor support and only weak resistance clusters would be left thereafter to slow further price progress.

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IWM remains stuck in a consolidation range and the IWM robot still stays in cash. From a technical point of view, such consolidations tend to resolve into the primary trend which is clearly upwards.
Billy

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