I've recently shared the bullish case of gold miners. Now there are cracks appearing technically.
I've completely misjudged the potential impact of mining and commodity trading giant Glencore's blow-up. In 2014, it was Fortune's #10 largest company in the world! The company is actively blowing up. We don't know how this will play out and as technical traders, it really doesn't affect us.
What we do know is this overhang is yet another reason for investors to stay away from commodities in general.
Does this impact Gold's potential bottom? Maybe. Does it impact the weekly bullish divergences in many gold miner charts? Again maybe, not yet and we can't know. We've seen NO evidence the technical picture is damaged outside of a very short term time frame.
We do know the bearish harami candlestick setup in gold miner ETFs GDX and GDXJ confirmed lower. It's possible, given the MACD placement and the continuous rejections at the falling 50 day moving average, a roll over is about to occur here. That said, momentum is still neutral on a daily timeframe until it isn't.
This same setup is seen in Oil as well.
On a somewhat related note - it's never wise to have patience with formerly strongly green trading position that's turned red, particularly in a market this volatile. As a rule of thumb, i've taken my entries from last week off the table. It sucks missing a great profit taking opportunity, but oh well!
Trading is tough. You need to have the right idea, the right time frame and the correct mental approach to really nail a home run. I still believe this idea is still in the right ball park, but the time frame may be wrong.
Thanks for reading!
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