Gold mining stocks have been getting slammed lately, and the exchange-traded funds that track them are feeling the pain. So, this week, I’ll be talking about GDX (which is the Market Vectors Gold Minors ETF), and showing you how to make great money using Hawkeye Volume Based Indicators.
Let us begin by looking at the weekly chart. On the weekly GDX, you can see that we have had very high volume lately.
In fact, notice the high volume bar that came in with a red dot on it. That’s the Hawkeye Volume Radar, which tells us that we’ve just had an ultra-high volume week. If you look prior to that, we had pretty low volumes going through, so we painted the Hawkeye Volume as a white bar.
The reason for this is both because of the price action and because we had a gap down (see the red arrow on the chart above). Now, if the close was a little bit higher, then the Hawkeye Volume would have turned green. But, it didn’t. It is showing you that there is no demand. In other words, the selling pressure has been taken off. Although it gapped down, it rallied back up during the week.
So, this coming week is going to be very interesting, because if we get a week that puts in a Hawkeye Pivot (an isolated low on the bar with the red arrow which we won’t know until the end of this coming week), we will expect a 3-5-7 bar reaction in an up move.
So again, be very careful. You can trade the up move which might be quite violent, but the overall bias is down. It could be just a bear bounce.
If we now go on and look at the daily you can see the story unfold a little bit further.
Again, if we look at the Hawkeye Volume bar on the GDX, it’s green with a red dot on it showing that it was ultra-high volume. That is confirming the no-demand of the weekly, and that we expect the bias to be up this coming week.
You can also see that, providing that the low of Friday is not taken out on Monday, we will also put in a pivot low which will also give us a 3-5-7 bar reaction in this up trend. So, we can quiet easily see it start moving up around to the trend dot value or higher.
And then, if we go over to the 240 minute, it all becomes a little bit clearer, because on the 240 minute you can see you had two opportunities in that down trend (where I placed the red arrows) to get into this trend down if you missed it.
But then, if you look right at the live edge of the market, we have two volume bars that are green, showing us that the volume has come in.
We have a wide ranging bar that’s come in, and everything is set up here to confirm the daily time frame.
So, it is leading the way to show that this should be pushed up next week.
So, keep an eye on it.
If you are trading the Forex, remember that you can trade XAUUSD.
So, we have a very interesting week coming up.
We could see quite an interesting rally coming up on the faster time frames taking this up to test itself before it will probably revert back into its downward trend.
Now, all of this (and much more) is demonstrated in our Wednesday room by my colleague Randy Lindsey.
So, I cannot encourage you enough to come along to the Wednesday room.
Please contact us at [email protected] for any questions you might have about using Hawkeye Indicators in your trading!
[The red and cyan arrows are included for illustration only and do not form part of the software]