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Wednesday, October 16, 2013

short EMAs illustrate depth of gold miner suckitude

The shorter-period the EMA that governs a move, the more unambiguous the move is, as far as I'm concerned. Normally I've followed EMA(16) for the miners; for other more boring stocks like banks and such, maybe you want to use an EMA(20) or even EMA(50)?

Anyway, the shorter the EMA, the worse the downmove is. That's the general idea. So have a look at this:

The $HUI's recent month of puke has been governed by the EMA(10). That means I consider this dog to have utterly no signs of life whatsoever unless it can get above that really pathetic short-term EMA.

But look who's even worse:

GDXJ's month of pukitude has been governed by the EMA(8). That's even worse. So even yesterday's hopeful upward thrust by end of day still didn't manage to get GDXJ above the exponential 8-day average of prices.

You can't even trade the oversold condition, that's how little hopefulness this has.

Seriously, that is one committed downward spiral.