Earlier on Wednesday, I was bemoaning my completely ham-handed screw-up of a super-clean trade, which was go to very long the GDXJ (junior miners). This trade had everything going for it, but I managed to mess it up anyway! But I’m going to get that sour taste out of my mouth – – as well as the sour taste of anything to do with gold disappointing me so many times – – and offer up the notion that maybe, just maybe, gold miners make sense now.
Let’s start off with the EUR/USD, which has the Euro grinding down to, incredibly, sub-par values! My view here is that we might be setting up for a bounce up to that trendline.
If that happens, the US dollar will weaken, and gold should strengthen, which would likewise set up gold (shown here by way of the /GC futures) back up to its own broken trendline. Keep in mind, this is a swing trade, probably measured over the span of a couple of weeks. It isn’t a long-term setup.
Thus, junior miners (GDXJ below) would participate in the rally. It seems to me 29.80 is a good, clean stop-loss price.
The funny thing is that, as clean as GDXJ looks, I went through 70 different charts of individual miners and found hardly any that looked appealing. I will say, however, that the three below looked not-too-terrible, maybe even as long-term holds!
