VanEck Gold Miners ETFPembelian
GDX Not Done Yet
Diupdate
Gold falls as US dollar rises, accompanied by an across the curve rise in yields. Today’s macro news was relatively light with GDP data coming in slightly lower at 2.2% vs 2.4% expected, and initial jobless claims 211K vs 225K expected. There was a new piece of trade news indicating that China is willing to give the US more access to its domestic cloud-computing industry.
The market is currently looking for more directional signals, whether it be from trade news or economic data. The yield curve remains inverted when you consider the 3 months and 10 year, however that does not give a clear sell signal as of yet. The initial sell-off due to the inversion was quickly bought up, indicating that there’s still a lot of bullish momentum. A recent JPM analyst showed that even though the 3 and 10 inversion preceded all the recessions, it wasn’t until months later that the market turned negative. In fact, the market performs has historically performed well right after an inversion. What I believe is most likely is that the SPX will trade in a fairly large range until a string of positive or negative news can push it into a longer trend. Range is between $263 and $285, it seems like a large range but when considering the amount of volatility we’ve had over the last year, it’s not unlikely that we may get a 5%-6% correction, especially since the SPX has been trading at the top of its range over the last 6 months. If the correction does come, I believe it might cause some investors to think the same 2018 sell-off is happening, and pile into gold as a safe haven.
Yield Curve Forecast:
Yields will likely remain flat and trade within the current range, unless a string of positive economic news is released. The 10 yr is likely to trade within the 2.35%-2.45% range. This will help support gold prices in the near future.
US Dollar Forecast:
The US dollar has recently consolidated and has finally pushed upwards towards its resistance at 12275 (US dollar index). It’s currently trading in an ascending triangle pattern and could be stopped again at that key resistance. If that’s the case, then I expect the US dollar to fall to the sub 12100 levels. This will help push gold prices up further in the near term.
Gold Miners Forecast:
I believe gold miners still have more room to run for several reasons, most are mentioned above:
1.) The probability of the US dollar going on a major bull run is slim.
2.) Yields should continue to be pressured downwards/staying in this low range
3.) Uncertain backdrop of global growth won’t cause a major sell off in safe haven metals such as gold
I’ve accumulated 10% of a full position in
NUGT today at $20.47 at that first support, which it proceeded to break through in the afternoon. Looking to add 30% of full position at $19.05 and then another 30% at $18.
The market is currently looking for more directional signals, whether it be from trade news or economic data. The yield curve remains inverted when you consider the 3 months and 10 year, however that does not give a clear sell signal as of yet. The initial sell-off due to the inversion was quickly bought up, indicating that there’s still a lot of bullish momentum. A recent JPM analyst showed that even though the 3 and 10 inversion preceded all the recessions, it wasn’t until months later that the market turned negative. In fact, the market performs has historically performed well right after an inversion. What I believe is most likely is that the SPX will trade in a fairly large range until a string of positive or negative news can push it into a longer trend. Range is between $263 and $285, it seems like a large range but when considering the amount of volatility we’ve had over the last year, it’s not unlikely that we may get a 5%-6% correction, especially since the SPX has been trading at the top of its range over the last 6 months. If the correction does come, I believe it might cause some investors to think the same 2018 sell-off is happening, and pile into gold as a safe haven.
Yield Curve Forecast:
Yields will likely remain flat and trade within the current range, unless a string of positive economic news is released. The 10 yr is likely to trade within the 2.35%-2.45% range. This will help support gold prices in the near future.
US Dollar Forecast:
The US dollar has recently consolidated and has finally pushed upwards towards its resistance at 12275 (US dollar index). It’s currently trading in an ascending triangle pattern and could be stopped again at that key resistance. If that’s the case, then I expect the US dollar to fall to the sub 12100 levels. This will help push gold prices up further in the near term.
Gold Miners Forecast:
I believe gold miners still have more room to run for several reasons, most are mentioned above:
1.) The probability of the US dollar going on a major bull run is slim.
2.) Yields should continue to be pressured downwards/staying in this low range
3.) Uncertain backdrop of global growth won’t cause a major sell off in safe haven metals such as gold
I’ve accumulated 10% of a full position in
NUGT today at $20.47 at that first support, which it proceeded to break through in the afternoon. Looking to add 30% of full position at $19.05 and then another 30% at $18.Trade aktif
GDX opened higher but has since then sold off as expected to yesterday's close. It's possible that today's initial gain was partly a normal re-tracement after a large 2 day drop. Volume was relatively low today, which explains the slow and tight movement within a tight range throughout the day. Monday volatility should pick up again as investors react to the economic data, which will decide whether this is the new support for GDX or it continues down.
Position Update:
Still only have 10% in
NUGT so far. Didn't want to add any today as I believe the risk/reward is not optimal, more likely that it'll to go down further before pushing upwards.Trade aktif
Yields rose sharply today after better than expected Chinese manufacturing data came out. However it did include the Lunar New Year period, therefore the data should be considered carefully. Gold continues to be pressured downwards by the rising yields and rising US dollar. It has found temporary support 1286-1287, and I believe it could continue downwards and test the 1283 area. This is due to the US dollar still having some room to run before it hits resistance (see US dollar chart below). I’m still bullish on gold miners due to what I believe was a bit of an overreaction to the Chinese data today. Took the opportunity to add to my
NUGT position throughout today.Trade Update:
Added 40% of full position of NUGT. Now own 50% of full position at an average cost price of $19.02.
There is the potential of a further sell-off tomorrow given the strong momentum today, if that’s the case then I’ll be looking to add more to the position. Stop loss will be 3% of full position at any time throughout this trade.
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GDX has been following the predicted trade path relatively closely. The trade is now in the money with still 50% cash left to put in. Current position: 50% of full position in
NUGT at avg cost of $19.02. Will be looking to add another 20% at around $19.1-$19.2 as I believe there will be a retracement after such a strong move upwards.
Stay tuned for more updates as I place the trades.
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Updated Position:Still own only 50% of full position of
NUGTToday's Trades:
Did not make any trades today since I missed the window where
NUGT was trading at 19.33. My limit order was placed at 19.2, and by the time I was back it was already trading above 19.6. I decided not to add to my position because I didn't like the risk/reward for any entry price over 19.35 for several reasons:
1.) I try not to hold large positions over the weekend when potential trade news could come out
2.) PMI data is coming out on Monday
3.) Really low volume today, indicating a lot of consolidation and could see a large movement going either way.
You can see my full detailed reasoning and plans for the trade on my blog GDXdaily.com
Catatan
*Correction*: Not PMI data, Durable Good data is coming Monday.Trade aktif
Look to take profit today at the high points and add to position at the low points. I'll be looking to sell 50% of current position and add back most of it throughout the day.
Will update further as I go.
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