Gyroscopic Investing

Gold juniors have broken the major downtrend line from the peak in 2011 and have successfully retested it.  They were then deflected by the intermediate downtrend line from the 2012 peak, twice.  If It can overcome that and the tentative downtrend line from the peak earlier this year as well as fill the gap and also break the high of the pre-gap bar, there might be enough strength to break the last, minor downtrend line from the peak in 2014.

[align=center][img width=800]http://i59.tinypic.com/255l1nd.png[/img][/align]

On the downside, fundamentally juniors are facing an ongoing cash flow crisis and also will need to write down their reserves due to the declined gold price (assuming they even have any).

Broke the intermediate and tentative downtrend, but not on higher than average volume.  May be slowing down.

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Thanks for posting, nice charts and helpful insight into the price action.

I once loved these funds (including GLDX and some individual gold stocks) too much, I know better now  (I think it represented a sickness, OCD?) and think I'll stay away even when they go back up 

Now that the gap has been filled, let's see if dual intermediate and tentative support holds.

[align=center][img width=800]http://i57.tinypic.com/28hdk68.png[/img][/align]

Here's a broader overview from the peak in 2010:

[align=center][img width=800]http://i59.tinypic.com/2ennqy1.png[/img][/align]

If you take the high price of the 2010 peak as 1794.4 and divide by 365.25 days, you wind up with 4.91 years.  2010.92 + 4.91 = 2015.83 which might be the actual bottom.

Zzzz.

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MG, while on the subject of gold mining stocks, I don't know much about them. Would a safer, more boring way to play the sector be to buy NEM or PSAU? What's you gut feel as to when the bottom could be?

ochotona wrote: MG, while on the subject of gold mining stocks, I don't know much about them. Would a safer, more boring way to play the sector be to buy NEM or PSAU? What's you gut feel as to when the bottom could be?

The SGDM ETF would be a safer way to go.  It weights by quality instead of market cap.

Assuming you believe gold stocks lead bullion, then my gut feels the bottom should be somewhat before 2015.75.  Juniors are currently struggling with severe cash flow issues, so if anything starts to look good for them, it should look good for everyone else.

MachineGhost wrote:
[align=center][img width=800]http://i59.tinypic.com/255l1nd.png[/img][/align]

I think there is a good potential for a nice play in here some where for a VP.  I would be curious how this graph would look with the trend lines starting from the point just below the first red arrow?  It seems the more recent movings could still be a "bull trap"...but over all this sector has potential imho.

4x4 wrote: I think there is a good potential for a nice play in here some where for a VP.  I would be curious how this graph would look with the trend lines starting from the point just below the first red arrow?  It seems the more recent movings could still be a "bull trap"...but over all this sector has potential imho.

Here's what it looks like now:

[align=center][img width=800]http://i62.tinypic.com/2ldr9l.png[/img][/align]