Just like it was the case yesterday, we’re sending this brief message to let you know that today’s move higher, even though it seems significant, it doesn’t change much in our view. The outlook remains bearish and we think that we will see much lower gold, silver and mining stock prices in a few weeks (of course, we don’t think that we will have to wait for the market to turn down that long).

The price levels that seem significant enough to change the outlook on their own are already known to you - these are the stop-loss levels for the current trade and they are visibly above the levels at which gold, silver and mining stocks are right now. Speaking of the stop-loss orders, we are updating the stop-loss level for the DUST ETN to $10.37, which better corresponds to GDX at $21.83.

Please note that when we entered this short position, we wrote that the miners could move even to $21 or so and it would not invalidate the bearish outlook as it would simply make the right shoulder in GDX higher than the left shoulder by as much as the recent local low was higher than the previous local low.

Moreover, let’s keep in mind that we are not aiming to gain several dollars (in case of gold) in this trade, but about a hundred of them, similarly to what we’ve done in the previous short position (when we profited on gold’s decline from $1,300 to below $1,200). Consequently, this week’s movement doesn’t invalidate the points that we made previously, nor does it make them incorrect. It simply seems that the market will take an additional week or so to decline to our target areas. The situation could change and become bullish - and we will let you know once that happens - but for now it remains bearish. The right shoulder of the massive and bearish head-and-shoulder pattern is taking a bit longer to form and is more volatile - it doesn’t seem there’s much more to it.

It seems that the markets are overreacting to the negative news right before Fed’s announcement thus expecting more dovish comments regarding the interest rates. Once it turns out that nothing really changed, the downtrends will likely continue.

We’ll discuss the situation in greater detail in tomorrow’s alert.

Thank you.

Sincerely,
Przemyslaw Radomski, CFA
Founder, Editor-in-chief

Gold & Silver Trading Alerts
Forex Trading Alerts
Oil Investment Updates
Oil Trading Alerts