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The Market Vectors Gold Miners ETF (NYSEARCA:GDX), like stocks, took a licking on Wednesday, but kept on ticking yesterday.
I have been bullish on gold and the miners ever since the time-and-price square-out at 114-115 due in late December -- 180 degrees from the late June selling climax.
On Wednesday, subscribers of The Daily Market Report [subscription required] were stopped out with a nice profit of a long standing swing position in GDX when a tight trailing stop was hit.
The trailing stop had been cinched up because GDX looked in need of a well-deserved rest.
A multi-day backtest and undercut of the 200 DMA looked in order, potentially even a backtest of the Neckline at 24.
It still may play out that way, but yesterday, GDX like the S&P 500 (INDEXSP:.INX) -- two unlikely bedfellows -- roared back in tandem without the benefit of a well-deserved pullback.
That's what bull markets do. They don't accommodate. They don't give those waiting to get in a chance to do so. And when they do, they usually test their resolve, and the give-back is greater.
That said, clearly, it looks like the trajectory for GDX to its Quarterly Swing Chart high as projected in this space [subscription required] is going to be sooner rather than later.
The Quarterly Swing Chart high is 26.91. This was the October high, the fourth-quarter high.
At the same time, late February is 180 degrees from the late August high, 120 degrees from the late October high, and 60 degrees from the late December low. It looks like a high-to-high-to-low-to-high cycle is due to hit.
This cluster of time harmonics indicates a turning point and may mirror the pattern from late August, especially if GDX runs head-long into it, coincidentally satisfying a turn up of its quarterlies.
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