I talked her out of it partly because the gold sector had already rallied nearly 40% in just two months. Commercial Traders (aka the smart money) were building a large short position in gold futures. And, the Mother Indicator<\/a> – my proprietary technical tool that suggests doing the exact opposite of whatever my mother wants to do with her money – was flashing a sell signal for the gold sector.<\/p>\n On Monday, the VanEck Vectors Gold Miners ETF (GDX) was trading for just about the same price it was at back in July.<\/p>\n “Gold stocks haven’t fallen like you thought they would,” Mom said. “Besides, even your own people think gold is ready to move higher.”<\/p>\n Mom was referring, of course, to the mutinous essay<\/a> my friend and managing editor Mike Merson published last Saturday.<\/p>\n “That’s what makes a market, Mom.” I said, “People have different opinions. There are lots of folks who disagree with me. But, I still think gold and gold stocks are headed lower first before they head higher again.”<\/p>\n “So, how will I know when it’s time to buy?” she asked.<\/p>\n “You’ll know it’s time to buy,” I replied, “when it’s the last thing you’ll want to do.”<\/p>\n Gold and gold stocks are down sharply since Monday – especially after yesterday’s brutal decline. And, it looks like there’s still a bit more downside ahead.<\/p>\n Here’s an updated look at the chart of GDX I showed you a few weeks ago<\/a>.<\/p>\n GDX closed yesterday right on the support line<\/a> that has stopped every decline over the past two months. The problem, though, is the more a support line is tested, the weaker it becomes. It’s like jumping up and down on a frozen lake. Eventually, the ice breaks.<\/p>\n If support breaks on GDX, then the next downside target is at about $25 per share. I suspect there’s a pretty good chance GDX will get to that level in the days ahead.<\/p>\n Notice how all the various moving averages (the squiggly lines on the chart) are in a bearish configuration – with the 9-day EMA<\/a> trending below the 20-day EMA, and the 20-day EMA trending below the 50-day MA. This sort of setup usually leads to lower prices.<\/p>\n So, it’s still too early to buy gold stocks here. But keep an eye on this chart, and remember what I told my mom…<\/p>\n “You’ll know it’s time to buy when it’s the last thing you’ll want to do.”<\/p>\n Best regards and good trading,<\/p>\n Jeff Clark<\/p>\n Will you be buying gold if it breaks to the downside? Are you looking to buy for the long haul, or a quick trade?<\/p>\n![\"\"](\"https:\/\/assets.jeffclarktrader.com\/ee-assets\/channels\/articles\/mm\/201911-MM\/20191108-MM-01.png\")
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