Wednesday, February 26, 2014

GDXJ either falls from here or doesn't: an analysis

Here's some TA:

GDXJ has fallen back to around its short-period EMA.

This is either yet another pullback before GDXJ goes up higher, or it's a sign that GDXJ is rolling over.

GDXJ has done this twice before and went back up: early January, and late January.

Now, I've come across something these past few years that I call the "rule of three": if you have seen a chart do something twice, and you expect it to do the same thing a third time so you can make easy money, you're going to be let down.

This is because by the time the third occasion comes up, so many people have figured out that these occasions make them easy money that the party bus is already overcrowded and there's not enough people left out to get on to make the thing happen a third time.

Also, the market is supposed to screw over everyone who thinks they've found a way to make easy money.

Now combine this with these further points:

1. PDAC happening this weekend, and the tradition is to puke juniors into oblivion the weekend of PDAC;
2. gold is traditionally weak in March, and junior miners' stock prices depend on rising gold prices;
3. that chart pretty much shows an insurmountable volume peak in mid-Feb.

So given all that, which way would you expect GDXJ to move from here?

So I'm looking for broken charts to sell right now; B2Clive still looks great, but Rio Alto not so much, for example. I'm in no rush, I've got some great unrealized profits and can leave some money on the table in case everyone else is already thinking the same as me.

UPDATE: an five minutes later the market gave us the answer: puke everything, it's PDAC time!


  1. Promise us you'll take Otto's bingo card to PDAC and do your best to fill it out.

    1. You really think I'm going to waswte any time talking to exploreco IR clowns in the booths?

      Fuck that. If I do go in, it'll only be to grab a handful of gold-foil chocolates at FVI's booth, and then check out the Hochschild boothbabes. That's it.

      In fact, I might just take some boothbabe photos for the blog, thus degrading junior mining to the level of a cheap beauty contest.

    2. But it already *is* a cheap beauty contest.

      I just thought playing IKN bingo might relieve you of the misery of actually being there. But maybe Brent Cook's shiny aura does that all by itself.