GDX Outperforms Per our Call
by Mike Paulenoff
July 11, 2014 • 12:00 AM EDT
On June 16, we noted to members that we expected the Market Vectors Gold Miners ETF to outperform the SPDR S&P 500 (SPY) due to the pattern of the relative-strength chart.
Charting the ratio of the SPY price over the price of the GDX, we noted a double-top formation that was (and continues to be) trending lower, warning us to expect the SPY to continue to underperform the gold-mining ETF.
Since that time, the GDX has climbed 11.7% -- with a 3.5% move alone this past week since we reiterated our call on July 8 -- while the SPY has appreciated only 1.4%.
Judging from the magnitude of the huge double-top and the angle of descent, the outperformance of the GDX and/or the underperformance of the SPY should continue -- and likely accelerate -- in the days and weeks ahead.
This bullish outlook is supported by the weekly, big-picture chart of the Market Vectors Gold Miners ETF, which continues to improve and strengthen, with the price structure looking like it is emerging from a high-level, three-week bullish digestion period.
If accurate, this analysis points toward upside continuation that tests the March rally peak at 28.03. If the March high is hurdled and sustained, the GDX should accelerate towards 31.30-32.20 thereafter.
Mike Paulenoff is the author of MPTrader.com, a real-time diary of his technical analysis & trade alerts on
ETFs for precious metals, energy, currencies, and an array of equity indices and sectors, including international
markets, plus key ETF component stocks in sectors like technology, mining, and banking.
Sign up for a Free 7-day Trial!
More Top Calls From Mike
On December 13, 2024, with NVDA trading at 132.54, down 13.3% from its All-Time High at 152.89 (11/21/24), and bearing down on a critical 8-week support plateau at 131-132, this is what I posted to MPTraders:NVDA Update: Approaching key support in the vicinity of 132 that if violated and sustained, could unleash the downside potential derived from a two-month top formation (everyone sees the Head and Shoulders formation by now).
Friday afternoon, fifteen minutes before the closing bell in the equity indices, this was my parting comment about Bitcoin:Heading into the weekend, the technical setup argues against holding shorts in Bitcoin... no?...
Many of you have been members of MPTrader for years, perhaps decades (I have been providing MPTrader.com analysis since February 2003!). Rarely do I take a victory lap about my stock, ETF, and market calls, largely because I have always thought my work should speak for itself, which obviates the need to bloviate and beat my chest to stroke my ego. At my core, I am a market nerd and Geek, not a slick-talking marketer (for better or worse).
Back on November 12, 2024, fellow MPTrader member "Rayray" wrote the following when ARCH (Archer Aviation) was trading at $4.83:Mike, as you may recall I have been an active follower of ACHR. I no longer have a position that I trade off of and am on the sidelines watching a move that I should have participated in . That said, is this the move to $9.00 that has been on the table for a while ?... My analysis: NO!...
On the morning of Tuesday, November 12, 2024, I posted the following Heads-Up to MPTrader members concerning my DIS (Disney) analysis ahead of earnings:DIS (Disney) reports earnings on Thursday morning. Technically, DIS approaches Earnings in strong near-term technical condition that argues for a positive reaction to earnings. As long as any forthcoming weakness is contained above 94.80, DIS points higher to 105.10/40, and if taken out, then to 113-115... Last is 100.25...
