Friday, July 11, 2014

Yesterday's GDX and GDXJ action

Chronicles of Brodrick - bearish outside day for miners yesterday. He points out that bearish outside candles were printed on a lot of stocks.

Yabut Sean, the selloff in the miners only happened at 3PM, so that candle doesn't tell the whole story. Here's the intraday from Google Finance (the Bloomie term for peasants):

The 3PM selling spree did not correspond to any action in either US equities or in the precious metals themselves. Nor could I find any news that would be PM negative at 3PM. So it's not an algo.

Was it just someone large getting out of his position? Was it just someone concerned that GDX and GDXJ were +3SD (thus overbought) by the daily candles?

Or is it part of a conspiracy wherein someone buys large positions in miners, then drives up the PMs, then sells the miners at a 50% profit before dumping the PMs back down? Did someone really try hard to print a bearish outside day, just to scare charties?

Now here's something neat: it doesn't show up well in GDX's chart, but in GDXJ's chart there was a significant enough tickdown V at precisely 1PM that also didn't correspond to any action in US equities or miners. So I'm guessing if there is a conspiracy, then someone probed support at 1PM; they saw there was a fair bit, and thus they marshalled some more strength to push harder at 3PM.

So is this someone short the miners who's now trying to drive them lower?

If so they're fighting seasonality.

Or are they just trying to drive the price down so they can shake the tree? That would be a good reason to make sure a bearish outside candle shows up on the chart.

Anyway, I like this bit from Sean:
You probably didn't buy as much gold and silver miners as you wish you did before the recent run-up. Now you'll get your chance to buy before the NEXT run-up.
I like it because I can imagine a lot of other people thinking this same thing. So if there is no weakness in PMs the next few days, I'd expect any pullback just might be treated as a buying opp by goldbugs.

It's not where we separate the men from the boys, Sean: it's where we learn how committed the goldbugs really are to this upmove.

No comments:

Post a Comment