Gold is stuck.
The shiny yellow metal just can’t seem to make a clean break above the $1,300 level. Frankly, it really needs to get above $1,310 to kick off a new leg higher.
Gold stocks are stuck, too. The VanEck Vectors Gold Miners Fund (GDX) has been chopping back and forth between $22.10 and $22.60 for the past month.
GDX attempted to break out of that range yesterday morning when it was trading as high as $22.70 in the pre-market… before it got smacked down and gave back all of Wednesday’s gains.
But, man… I still like the look of the chart…
Notice how all of the moving averages are coiling together. The 50-day moving average (MA), 9-day exponential moving average (EMA), and 20-day EMA are all sitting right at the $22.44 level – which is the current price of the stock. Energy is building right here as GDX approaches the apex of its consolidating triangle pattern (the red lines).
There’s no way to tell for sure which direction GDX will break out of this pattern. All we can say with certainty is that once the pattern breaks, it should lead to a big move.
I have a bullish bias when it comes to gold stocks. So, I’m more prone to look for signs of a bullish breakout. And if GDX does break out to the upside of this pattern, then it projects a move to $24.30 or so on the chart – which is just below the 2018 high from back in January.
I don’t think it’s a coincidence that we’re getting this tight pattern right in front of next week’s Federal Open Market Committee (FOMC) announcement. Gold stocks tend to make large moves following announcements on interest rates. And the gold sector certainly looks like it’s gearing up for a big move.
One way or another, I suspect we’ll see some volatile action in the gold sector next week.
Best regards and good trading,
Jeff Clark
P.S. I really like how the Delta Report portfolio is set up for next week. The way conditions are – with tight, consolidating action ahead of a big catalyst – is rare. And it makes me excited to be a trader right here.
In fact, the strategy we have in place generates some of my biggest wins. To learn more about this strategy, and a Delta Report subscription, click right here.
Reader Mailbag
Today in the mailbag, Delta Report readers get excited about this week’s trade recommendation…
Looks like pretty good timing on the SPY recommendation so far. I’m in… (“Black Cat” alert.)
– John
Thanks for the timeliness of the SPY trade update regarding what price you’d look to sell! I had that very question nagging the back of my mind.
– Clarissa
Wednesday afternoon, Jeff wrote a poignant Delta Direct blog post in remembrance of D-Day entitled, “On this day 74 years ago.” (Subscribers can access it here.)
You responded…
Great piece on D-Day. My father fought in WWII and I spend a lot of time watching the American History Channel learning and understanding the sacrifice of many. God bless and thank you.
– Marc
God bless you for your thoughts here. It is so refreshing to see someone like you remember the important things in life and this is certainly one of them. Thanks for being you, never change please.
– Terry
Thank you for sharing your personal story of your visit to Normandy. We are so quick to take for granted the freedoms and luxuries we have today, but freedom isn’t free and so many gave selflessly of their lives that June day in 1944 and in so many other battles. God bless their souls and families. Thank you for reminding us what really matters.
– Charlie
I was touched by your tribute to the American soldiers who died on D-Day, and your reference to the current sad state of affairs in the USA. Society has changed a lot in the last 74 years. What we once worked for and appreciated, we now want for free (or on credit). That which we once respected, we now revile. Where we once took responsibility for ourselves and thought nothing of it, we now blame others and lash out in rage at them.
It is indeed sad that we are so focused on railing and raging at our perceived symptoms of decay in the social and economic fabric that we can’t see that “fixing” them brings no relief. The search needs to be much bigger and deeper than that. P.S. I am appreciating your analyses and the service altogether!
– Eric
As always, thank you for your thoughtful letters, questions, and suggestions. They’re a pleasure to read, each and every day. Keep them coming right here.