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<\/p>\n\t\tIt has been a frustrating year so far for mining stock bulls and bears.<\/p>\n
\t\tOne of those groups is about to be rewarded for its patience. The other is about to suffer some pain.<\/p>\n
\t\tThe VanEck Vectors Gold Miners Fund (GDX) closed yesterday at about the same spot where it started 2017. The fund has been a couple of points higher and a couple of points lower. Mostly, though, all the gold sector has done so far this year is frustrate the most participants possible on both sides of the trade.<\/p>\n
\t\tNow it looks ready to make a move. And from my perspective, it looks bullish.<\/p>\n
\tTake a look at this updated chart of GDX…<\/p>\n
\t<\/p>\n
\tGDX closed yesterday right on the resistance line of its seven-month-long trading range. This would normally be a logical place at which to expect some resistance. But there are a few bullish items of which to take note.<\/p>\n
\tFirst off, the recent rally attempt – which began in early July – has formed a series of higher highs and higher lows. As long as GDX can hold above last week’s low of $22.20, then the bulls get the benefit of the doubt.<\/p>\n
\tAlso, notice how the 9-day exponential moving average (the curvy red line) is trending above the 50-day moving average (the curvy blue line). This is a bullish configuration that often leads to higher prices.<\/p>\n
\tOf course, gold stock bears can argue these conditions existed before – during the rally attempts back in March and May. But there’s something that’s new this time around…<\/p>\n
\tThe gold stock Bullish Percent Index (BPGDM) is flashing a buy signal, and it looks ready to accelerate. Here’s the chart…<\/p>\n
\t![\"\"](\"http:\/\/assets.jeffclarktrader.com\/ee-assets\/channels\/articles\/Screen_Shot_2017-08-15_at_11.39.07.png\")
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\tA buy signal occurs when the BPGDM reaches oversold conditions (below 30) and then turns higher. This happened in early July, just as the current GDX rally attempt got started.<\/p>\n
\tThrough this whole time, however, the 9-day EMA on this chart was trending below the 50-day MA – which is a bearish configuration.<\/p>\n
\tSo, we had two forces conflicting with each other. That creates a choppy environment – similar to the action in GDX last November and December.<\/p>\n
\tBack then, the BPGDM triggered a buy signal in mid-November. But the gold sector really didn’t start moving higher until the 9-day EMA on the BPGDM chart crossed above the 50-day MA.<\/p>\n
\tOnce that happened, GDX busted out to the upside and gained 10% in about one month. Gold stock bulls should be looking for something similar this time around.<\/p>\n
\tBest regards and good trading,<\/p>\n
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<\/div>\n\tJeff Clark<\/p>\n
\tP.S. <\/strong>Do you see the same sort of upside in gold stocks right now? Send me your thoughts – along with any other questions or ideas – right here<\/a>.<\/p>\n \tFor today, a few pieces of kind feedback from Market Minute<\/em> readers…<\/p>\n \t\tJeff, thank you for your insights and educational essays in the Market Minute<\/em>. I find them invaluable. Thank you again for helping folks like me.<\/p>\n \t\t– Michael<\/strong><\/strong><\/span><\/p>\n<\/blockquote>\n \t\tI've only been receiving your Market Minute<\/em> newsletters for about a month which I was introduced to through my Palm Beach Daily<\/em> subscription. I find your market analysis very helpful. I often think it would be great if there was a like button at the end of the email like on Facebook. I'd be liking them all.<\/p>\n \t\tHave a great holiday with your wife. Life is too precious not to be spending time with the ones you love.<\/p>\n \t\t– Lucy<\/strong><\/strong><\/span><\/p>\n<\/blockquote>\n \t\tHi Jeff, just want to say thanks for the time that you take to put together the emails on option trading. I have dabbled in option trading over the years – I'm finding myself closer to retirement at which time I will have the time that it takes to be a successful option trader, likely using covered call\/put selling and other conservative strategies to enhance\/earn a reasonable rate of return on a portfolio of blue-chip stocks.<\/p>\n \t\tI found your article about using a portfolio of $100,000<\/a> very useful in helping me decide how much of the portfolio should be used to trade options. I may be missing it, but can you provide me with the link that will allow me to subscribe to your option trading report?<\/p>\n \t\tAs summer draws to an end, I hope you find the time to spend more time with your children before they return to school along with your “demanding” wife<\/a>!<\/p>\n \tReader Mailbag<\/h2>\n
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