This is probably it, folks. The top is likely in. Perhaps for a long time - in terms of months.
Gold is down about $20 since I posted yesterday’s intraday Alert, so it seems that we managed to catch the second top just as we did with the previous one.
Silver is now about $0.40 below it was trading when I posted yesterday’s Alert about taking profits off the table, so it does seem like that was the top.
In the case of miners, we see something really interesting. And I don’t mean just their extreme weakness relative to gold.
I mean the black rectangle that preceded even yesterday’s exceptional weakness. When we saw the previous black rectangle this year, I marked it with an orange arrow, and I described it in the following way:
“What’s interesting is that we had a “black candlestick” yesterday. Those are formed when the price declines between the opening bell and closing bell, but because the open price was significantly above the previous day’s close, the entire day ends up being positive for the price. This way, we have a daily rally (closing prices) and a daily decline (just the intraday move) at the same time.
I marked other cases like that with orange arrows. As you can see, those tend to take place either somewhat in the middle of the rally (mostly in terms of time) or right before the top. Also, if the rally wasn’t significant, it tends to mean that it’s just the interim indication – one that’s going to be followed by another move up.
In the current situation, this suggests that GDXJ could reach the $47 - $48 area in a week or so. This fits the technical pictures for gold and the USD Index.
And it supports further gains in the current trading positions.”
I wrote that on Jan. 8. – indeed a “week or so” (a week and one day) after that we took profits from the long positions.
But the most interesting thing is what I put in bold higher – I mean that those black candlestick tend to form in the middle or right before the top. The previous one was in the middle of the move higher, and the second one formed right before yesterday’s session, which probably marked the top.
Save this analysis or bookmark it, and if anyone ever tells you that the history doesn’t rhyme on the markets (the basis for technical analysis), just point them to the above.
Also, for the record, GDXJ was trading at about $46.1, when I posted yesterday’s intraday Gold Trading Alert about shorting it and NEM was trading at about $41.6.
So, where do we go from here?
Lower.
My minimum short-term target here is $40 or actually slightly below it. That’s where we have the previous lows as well as two Fibonacci retracement levels:
- The 61.8% retracement based on the 2022-2024 rally
- The 50% retracement based on the 2024 rally
This makes the $40 area a likely target for a quick rebound. This is up-to-date at the moment of writing these words – it may change. (My subscribers will be kept up-to-ate at all times, and I may or may not provide target updates in future free analyses.)
I can’t explain it, but my intuition tells me that the move lower here will be fast, so be prepared to take profits in 1-2 weeks. We definitely don’t “have to” see a sharp decline - it could be steady, and the similarity to how gold dropped in 2013 would support the latter, but… Still, if gold and stocks decline at the same time (which might be the case), GDXJ could drop like a stone in water.
Ok, so I did end up explaining it. The truth is, however, that my intuition came first and the justification came later. Based on how my previous trades went and how I felt about them when they started – this is a good sign.
The way I see it now is that after getting to $40 or somewhat below it, we’d get a quick (volatile) rebound and then a slide to about $35. The next support levels are ~$30, ~$25, and then the 2020 lows at about $18-$20. Yes, the GDXJ is likely to slide all the way down there, and perhaps even lower.
I’m not married to the above outlook, but given what we see on the long-term charts it’s unlikely to change in the following weeks. Most importantly, though, this outlook doesn’t prevent me from making money on long trades, as you just experienced on your own.
A few more things before signing off:
- You’ll find precise target levels for GDXJ, NEM, and FCX as well as for gold and silver and some ETFs including leveraged ones (GLD, SLV, GLL, ZSL, AGQ, HGD.TO, HZU.TO) in the full version of this analysis – today’s Gold Trading Alert .
- You’ll find a very informative reply in the Letters to the Editor section below (this time, I’m quoting the entire Q&A as it might be important also if you don’t subscribe to any paying product or you’re subscribing to a different one).
- Yesterday’s well-being webinar focused on reducing/handling stress and anxiety went very well and we received great feedback during it. The session was the first lesson of the Breathe Your Focus Back course that was just launched. I reviewed the materials, I really like them, and think that those $49 that it takes to gain access to this course, would be an excellent way to park some of the profits that you just made (if you made them, that is – while I’m not providing full trade details in the free analyses, I do provide the general outlook, so you might have been able to reap profits recently, anyway). This doesn’t apply to the Diamond Package subscribers , as this course was added to their subscription automatically at no additional charge.
And with that being said, I wish you all an amazing weekend. You made some nice profits recently – it might be a good idea to take a break and celebrate a bit.
Letters to the Editor
Q: (that’s a comment from below yesterday’s Gold Trading Alert #2, but I think the reply will be very important to many of you)
“sure wish you had mobile alerts. ;( Missed the boat.”
A: We DO have mobile alerts. At the bottom of the menu on the left you’ll find two links to downloading the app. In fact, I’ll put them here as well:
- iOS app (called Circle)
- Android app (called Circle)
Log in with your Golden Meadow username/password and voila - you have Golden Meadow on your mobile. Then you can set up notifications exactly as you want them to be - you can customize this per space (e.g. you might want to get all Gold Trading Alerts notifications on your mobile, but not for other spaces). You can also navigate to notifications by clicking on your profile picture in the top right corner of the page and then selecting “notifications”.
This is how you can set/adjust notification settings for all spaces that include all the services on Golden Meadow. One notification panel to customize all this, allowing you to manage your attention exactly as you want. I’d suggest maximizing the amount notifications for premium products that you’re using for trades (just so that you don’t miss them). For others it might be better to keep notifications on Golden Meadow and using your e-mail.
You know, if you get notified on your mobile about every single thing, it might be too annoying, and you end up not paying attention to anything. Besides, the world provides us with enough distractions from what’s in front of us, and we don’t want to add more than needed to improve your life. We’re building all this to help you have a better life, not a worse (= more distracted / less in the present moment) one.
I’ve been putting it in the analyses several times, but perhaps it would be a good idea to keep it there.
Also, the move lower is likely just starting, so it seems to me you’ll be fine by taking action today as well.
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Thank you for reading today’s free analysis. The full version includes the exact profit-take levels, and my subscribers will also receive an intraday Alert if anything changes (just as they received one yesterday). I encourage you to become our subscriber and get those benefits while trade is still open. Alternatively, if you’re not ready to subscribe yet, I encourage you to sign up for my free gold newsletter today.
Thank you.
Przemyslaw K. Radomski, CFA
Founder, Editor-in-chief