Gold Mining Shares ETF Give Big Bangs for the Bucks.

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Gold Mining Shares ETF Give Big Bangs for the Bucks.

Last week gold went up 2% but the gold miners’ index, ETF GDX, rose 11%.

But be careful. We are highly overbought on gold and gold miners’ stocks GDX and should expect a pull back soon within the overall uptrend. In fact, a recent report from Morgan Stanley Australia, states that miners are now extremely overvalued. Example: Newcrest Mining (NCM.Australia) trading at $21.76 Australian Dollars, compared to fair value of $A12.90. That’s 68% overvalued.

Gold 133 Minute Chart (GLDV Golds ETF)
Gold Chart
The 133-minute chart (a third of a day that the ETF trades) shows a classic volume upthrust, followed by 2 bars of no demand volume indicating a probable pullback.
 
GDX 133 Minute Chart
GDX 06-13-16
The ETF of the gold miners is clearer. Again a volume upthrust, but look at the Trend dots. They are going flat, indicating this move is now in congestion entry, so expect a pullback in the overall uptrend.

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Definition of an Upthrust
An Upthrust Bar is a wide range bar, with a high volume and closing down. It indicates that the prices were marked up during the day, trading activity was high as indicated by the high volume, and the prices dropped to near the low (or to the low) towards the closing hours.

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We demonstrate this and many other methods in our live demonstration room held every Wednesday, and this is open to everyone. Click this link for more information or to join us in class.

Good Fortune,

Nigel Hawkes
Hawkeye Traders

[The magenta arrows are for illustration only and do not form part of the software]

Here We Go. Nearly There on Gold.

Friday saw a big move, and as I have been banging on about for some months there will be great opportunities this year.

So let us look at GDX, the gold miners ETF, which is a leading indicator for the gold price.

Daily Charts GDX
Daily GDX
As you can clearly see (indicated by the cyan arrow), ultra high volume resulting in the daily price commencing a new uptrend.

My favorite stock for gold is Newmont Mining (NEM). So let’s take a look at some charts.

Newmont Mining Weekly
Newmont Weekly Chart

Look at the last Hawkeye Pivot low (yellow dot). This is pushing price up on buying volume. So the last Pivot highs (shown with the yellow dotted line) are being tested.

Newmont Mining Daily
Newmont Daily Chart
Interestingly the high volume bar (with the yellow dot) occurred in price congestion, followed by declining volume, indicating accumulation (see my free volume book here for further information), resulting in the price commencing a trend run. But it has still to break the Pivot highs to the left (indicated by the yellow dotted line). When it does, with no part of the price bar straddling the dotted line, then we know we are in a strong uptrend.

Hawkeye Perspective
Nearly there! Be patient, this coming week will tell all.

We demonstrate this and many other methods in our live demonstration room held every Wednesday, and this is open to everyone. Click this link for more information or to join us in class.

Good Fortune,

Nigel Hawkes
Hawkeye Traders

[The cyan and magenta arrows are for illustration only and do not form part of the software]

Brace Yourself!

Let us recap on the last few weeks.

The S&P appears to be in the first stage of breaking down. We have a triple top on the Monthly, congestion entry on the Weekly and downtrend on the Daily.

Over the next few weeks the market will test the last Hawkeye weekly Pivot high, and then test the last weekly Pivot low at 2030. It’s also forming a weekly wedge profile and when broken – watch out!

Apple, as mentioned last week, broke down. The next test will be the Hawkeye weekly Zones at $76.

BUT here is the big story. Retail is in a bad, bad way. Profits are plunging for Macys, Kohls, Nordstrom, and Gap stores.

PacSun, Aeropostale and Quiksilver have filed for bankruptcy.

Amazon is doing great, but is that because the retail pie is shrinking or have people really changed their buying habits?

A great quote I found on the web:

“A wise man once said, our entire economy is based on folk buying stuff they don’t need, with money they don’t have…on credit. When that is shaken, and folk realize they don’t really need that new pair of shoes, or their 30K mileage car will last a couple more years…We’re toast.”

So what does Hawkeye say? Let’s look at one of the retail Exchange Traded Funds (ETFs) – RTH.

Monthly Chart
Monthly ETFRTH 
Triple top in congestion and Hawkeye Volume showing two months of white no demand volume.

Weekly Chart
Weekly ETFRTH
The price was rejected twice when it tried to break through the Hawkeye stop area. Trend is white and in congestion and three weeks of no demand and the last week selling volume.

Daily Chart
Daily ETFRTH
A Pivot high, indicated by the magenta arrow, is pushing prices down, with the Hawkeye Volume in downtrend.

Hawkeye Perspective
We are at major turning points on many sectors. So many opportunities to trade options and ETFs.

We demonstrate this and many other methods in our live demonstration room held every Wednesday, and this is open to everyone. Click this link for more information or to join us in class.

Good Fortune,

Nigel Hawkes
Hawkeye Traders

[The magenta arrows are for illustration only and do not form part of the software]