GDX next Buy Signal

[Pascal]

As of now, the GDX Model is in a weak short signal.
Last Friday, the MF closed above the Oversold level. This means that no Oversold buy signal will be issued today.
To issue such a signal, we first need to close below the OS level and then cross above it in subsequent days.

With the continued selling in the gold futures, there will probably be a large opening down-gap in GDX, which might be bought, except if we have a margin-call forced selling event.

I believe that it is safer to let this situation calm down. Even day trades will be very difficult: a large down gap that is not reversed by 10:00 tells us that we could have a down day. Hence, shorting if we have an early morning reversal occurring on low volume (negative MF divergence) is a technical possibility. However, gold itself is extremely oversold and a bounce in gold price will pull the miners, which makes shorting negative divergences dangerous.

However I would not be a bottom fisher of a large down-gap here, as statistic evidence shows that another down day is probable.

A "wait and see" position is probably a safe bet for the day.



Pascal