GDX, UCO, USO updates 01/11

GDX: Is wrapping up micro-4 of minute-i/a of minor-c of intermediate-c of major-c. Can still drop a bit lower (~$22.80), but a break over $23.47 (yesterday’s high) should then target the ideal target zone (grey box) for all of minute-i/a. I then expect minute-ii/b to fall back to the recent low of around $23, before minute iii/c takes hold to rip this to $32-$36.

GDX

How to trade this: Aggressive traders can long GDX for next rally higher into target zone. Stop at $22.65. Swing and long term investors should be long GDX and place a stop at $22.15

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UCO: Ripping higher and should be on it’s way to about $29. Counts nicely as (green) minor-5 of intermediate-a being underway. Commercial traders are starting to increase their short positions and are net short. However, the daily TIs are still firmly pointing up and are well-overbought telling is to expect higher prices even after a small correction. That would fit with a minute-iv and v for this minor-5 wave.

UCO daily

This $29 price target is where c=a and should ideally be Primary IV of cylce-C, with then V to new lows. This explains the commercial traders net short positions: these guys work on longer time frames. They were already long oil in May/June last year. Thus, there’s still upside left for us mortals but be aware that the oil-party will be over soon.

UCO weekly

How to trade this: one can still be long UCO, but it would not be unwise to sell it closer to $29. 

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USO: Same story as for UCO. Also has some more upside left. The TIs are still long and strong with no negative divergences anywhere. Ideal target is $13.

USO daily