GDX update 02/12

GDX: well that didn’t take long to disproof the count I (and many others btw) had for GDX as it made a lower low below the December low, thus taking the a/b or i/ii count off the table. Thus back to the drawing board. As said in my February 8 update: “A break below the recent December low is Bearish and would suggest something else is going on: a much more complex correction. Stops can be placed accordingly.” This shows why stops are important: they help you protect your capital in the case you are betting on the wrong side. Happens to everybody. Now all we can do is re-assess and see where the next opportunity lies. Cont’d below.

GDX weekly

I therefore went back to the weekly chart to re-assess the big picture. What I found is:

  1. the rally during the first half off 2017 still counts best as  wave a/1
  2. the decline during the 2nd half of 2017 still counts best as a corrective (7-waves) decline
  3. the next rally to $25.59 (a/i) still has only been retraced by 61.80% and found support at the 150w and 200w SMAs, which have flattened out after 5 years of declining. The 50w and 100w SMAs are already moving up out of their lows.
  4. As long as these two SMAs hold price we can expect higher prices longer term
  5. The current pattern since early 2017 looks more like corrective consolidation but a break above $25.50 is needed to confirm the anticipated move to mid-30s or higher is underway.

Thus, the best count now is to place red intermediate-b/ii at last week’s low, though it may go a little lower. However, from the weekly chart and daily chart below, it follows that price needs to hold the $21.50 region. If it doesn’t than black major-b is still underway and should seek out $16/$17. Shorter term I am looking for a bounce, but price does need to move >$22 to unlock $24.

GDX daily