In order to answer that question, let’s take a look at the chart…<\/p>\n
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In early October, GDX rallied above its 50-day moving average (MA)<\/a> (the blue line on the chart). Even more important, the 9-day exponential moving average (EMA)<\/a> (the red line) crossed above the 50-day MA as well. This “bullish crossover” often marks the start of an intermediate-term rally phase.<\/p>\n Traders can then use any weakness that causes the 9-day EMA to come back down towards the 50-day MA as a chance to add exposure to the sector.<\/p>\n If the 9-day EMA bounces off of the 50-day MA, then the stock is headed even higher. On the other hand, if the 9-day EMA drops below the 50-day MA, then it creates a “bearish crossover.” In that case, traders can then exit their positions for a small loss.<\/p>\n We only got one really good chance to buy into the gold stock rally. That was in late November – right before gold stocks blasted higher.<\/p>\n We may be getting close to another chance to buy into the gold stocks.<\/p>\n Following last week’s decline, GDX is now testing the support of its 50-day MA. If it can just hang out at this level for another couple of days, then the 9-day EMA will drift lower and test the support of the 50-day MA as well.<\/p>\n And, just like the buying opportunity in late November, traders will have a lower-risk chance to buy into the gold sector. If the 9-day EMA bounces off support, then the gold sector will be poised for another rally attempt. <\/p>\n If the 9-day EMA falls through support – thereby creating a “bearish crossover” – then traders can exit their positions for a small loss.<\/p>\n Best regards and good trading,<\/p>\n Jeff Clark<\/p>\n In today’s mailbag, a new Delta Report<\/em> subscriber comments on the service…<\/p>\n Jeff, I just joined a few weeks ago and love the service so far. Specific trades with an explanation of why you like them, using a lot of options and then the quick (brief), timely updates sent directly to my phone is exactly what I have been looking for in a service.<\/p>\n – Ruel<\/strong><\/p>\n<\/blockquote>\n Another subscriber wants more gold…<\/p>\n Dear Jeff… You don’t call… You don’t write… I’m beginning to think you don’t love me anymore.<\/p>\n Signed, gold and miner investor.<\/p>\n – Cal<\/strong><\/p>\n<\/blockquote>\n And one reader gives their take on market technicals…<\/p>\n We cannot seem to break the 9-day EMA. This market sucks, big time!<\/p>\n![](\"https:\/\/casey-assets.s3.amazonaws.com\/images\/misc\/jeff-clark-signature.png\")
<\/p>\nReader Mailbag<\/strong><\/h2>\n
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