A new short position will be entered by the IWM robot at a limit of 78.65 with an initial stop 2.10% above execution price. The stop will be near Monday’s close and allows for a gap fill attempt up to Quarterly R1 (80.45) which in my view would mark a confirmed end of the pullback if it were to be broken to the upside.

We have the pullback that everyone was expecting, supposedly to allow latecomers in the rally to seize buying opportunities. But the RT 20 DMF pattern didn’t show any sign of planned buying by large players, except for the usual late pop up. However, the 50-day moving average (79.05) was broken a little bit too easily and, now that bad news will be digested, it could be retested and exceeded many times before selling resumes in case of clear failure. A potential climax and capitulation could reach the second support cluster down to the 200-day moving average (75.39).

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Once again, most of the damage in GDX happened on the gap down yesterday, but the intraday pattern of the GDX MF has been basically flat and no progress was made toward the capitulation and oversold target of -1.45%. If the Money Flow improves today, we may be in for a round of patience in this trade. Monthly S2 (50.09) remains the most logical capitulation target at the second support cluster. The trailing stop was lowered to 55.63.
Billy

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