GDX trade ideas
Elliott Wave Expects Gold Miners ETF (GDX) to Continue RallyShort Term Elliott Wave View in Gold Miners Junior (GDX) shows that cycle from 10.4.2023 low is in progress as a 5 waves impulse Elliott Wave structure. Up from 10.4.2023 low, wave 1 ended at 32.35 and pullback in wave 2 ended at 25.67. Wave 3 higher ended at 37.47 and dips in wave 4 ended at 32.83 like the 1 hour chart below shows. The ETF has turned higher in wave 5 with internal subdivision as another impulse in lesser degree.
Up from wave 4, wave i ended at 33.35 and wave ii ended at 32.98. Wave iii higher ended at 34.79 and pullback in wave iv ended at 34.35. Final wave v higher ended at 34.83 which completed wave (i) in higher degree. Wave (ii) dips unfolded as a zigzag Elliott Wave structure. Down from wave (ii), wave a ended at 33.8 and wave b ended at 34.58. Wave c lower ended at 33.28 which completed wave (ii). The ETF has rallied higher again. Up from wave (ii), wave i ended at 34.63 and wave ii ended at 33.65.
Wave iii higher ended at 36.53, and dips in wave iv ended at 35.51. Expect wave v to end soon which should complete wave (iii). Afterwards, it should pullback in wave (iv) to correct cycle from 6.26.2024 low before it resumes higher again. Near term, as far as pivot at 32.83 low stays intact, expect pullback to find support in 3, 7, 11 swing for more upside.
Stay long GDX gold minersSimilar to the patterns playing out elsewhere, the "inflation trade" is still supportive of hard assets (and miners). GDX has had a nice pullback into 38% and move ave support. I've been long for quite a long time but those looking to get some exposure can use this as an opportunity.
Long 34, Stop 32, Trgt 40
Return/Risk = 3:1
GDX break out Have been tracking Gold and the Gold miners ETF GDX... It has been a while and it appears that Gold and GDX are at least in sync again.
GDX appears to have closed the week above the long term range and just broke out, if not about to...
MACD and VolDiv have not yet crossed over but indications show. The TD Setup is still showing primary bullish and a new Setup is forming, with a target to close above 36.26 within the next two months.
Elliott Wave Intraday Analysis on GDX: Further Rally ExpectedShort Term Elliott Wave View on GDX suggests that rally to 35.74 ended wave 3 on April 12, 2024. From there, the ETF pullback as a double three Elliott Wave structure. Down from wave 3, wave (a) ended at 33.44 and wave (b) ended at 34.35. Wave (c) lower ended at 32.43 which completed wave ((w)). The ETF then rallied in wave ((x)) as as a double three structure in lesser degree. Up from wave ((w)), wave (w) ended at 33.95 and wave (x) ended at 33.11. Wave (y) higher ended at 34.31 which completed wave ((x)).
The ETF then extended lower in wave ((y)) as a zigzag Elliott Wave structure. Down from wave ((x)), wave (a) ended at 32.78 and wave (b) ended at 33.60. Wave (c) lower ended at 31.90 which completed wave ((y)) of 4. The ETF has turned higher in wave 5. Up from wave 4, wave i ended at 33.3 and wave ii ended at 32.79. Wave iii higher ended at 34.95 and pullback in wave iv ended at 34.07. Expect the ETF to extend higher in wave v to complete wave (i). Afterwards, it should pullback in wave (ii) to correct cycle from 4.23.2024 low before it resumes higher. Near term, as far as pivot at 31.9 low stays intact, expect pullback to find support in 3, 7, 11 swing for further upside.
Opening (IRA): GDX February 16th 29 Monied Covered Call... for a 28.24 debit.
Comments: GDX (IVR/IV 40.8/ 32.9) is at the top of my IV screener for ETF's (along with GDXJ, which has higher IV, but is less liquid).
Buying stock and selling the -71 delta call against, resulting in a max profit potential of .76 ($76)/contract; 2.69% ROC at max; 1.35% at 50% max. That .76 isn't massively compelling, but the ROC is "decent" for what I'm trying to do in the IRA on a month-month basis.
Opening (IRA): GDX August 16th 22 Monied Covered Call... for a 21.01 debit.
Comments: There isn't much that is weak in this market ... . Adding a rung to my GDX position out in August at a strike lower than what I currently have on. (See Posts Below).
.99 max on BPE of 21.01; 4.7% ROC at max; 2.4% at 50% max.
Gold Miners ETF (GDX) Extending Higher in Impulsive StructureShort Term Elliott Wave view in Gold Miners ETF (GDX) suggests rally from 2.29.2024 low is in progress as a 5 waves impulse structure. Up from 2.29.2024 low, wave ((i)) ended at 30.48 and pullback in wave ((ii)) ended at 28.91. Internal subdivision of wave ((ii)) unfolded as a zigzag structure. Down from wave ((i)), wave (a) ended at 29.71 and wave (b) ended at 30.08. Wave (c) lower ended at 28.91 which completed wave ((ii)). The ETF then resumed higher in wave ((iii)) with subdivision as an impulsive structure.
Up from wave ((ii)), wave (i) ended at 30.9 and dips in wave (ii) ended at 29.53. The Index extends higher in wave (iii). Up from wave (ii), wave i ended at 30.39 and pullback in wave ii ended at 29.79. Wave iii higher ended at 32.69 and wave iv pullback ended at 31.71. Expect wave v of (iii) to end soon, then it should pullback in wave (iv) before the ETF extends higher again in wave (v) to complete wave ((iii)). Near term, as far as pivot at 29.53 low stays intact, expect pullback to find support in 3, 7, or 11 swing for further upside.
Opened (IRA): GDX March 15th 27 Monied Covered Call... for a 26.21 debit.
Comments: 42.2 IV/32.8% 30-day IV. Before I went to take a nap, added a "rung" on weakness here to my position, buying a one lot and selling a -75 call against. I already have a February monied on (See Post Below), so went out to March for this setup.
The call IV at the 27 strike: 37.32%. The put side at the same strike: 29.49% with their respective maxes being .79 for the 27 monied; .49 for the 27 short put.
As previously noted, this only makes sense in a cash secured environment where you don't get much BP relief by hanging out in the options. This cost 26.21 to put on in the IRA; the 27 short put would cost 26.51. Compare on margin: 26.21 buying power effect for this setup, 3.18 BPE for the 27 short put. Put another way: you generally don't do this setup on margin because it isn't BP efficient.
Metrics:
Buying Power Effect/Cost Basis/Break Even: 26.21
Max Profit (The Short Call Strike Price - Cost Basis): .79 ($79)
ROC %-age At Max: 3.01%/15.70% Annualized
ROC %-age at 50% Max: 1.51%/7.85% Annualized
Gold Miners versus Gold : the moment has come to buy.It is time to consider being LONG Gold Miners / SHORT Gold.
The chart speaks for itself. The ratio is not at absolute low however below the low of 2008 and within the low area
There is a 4 years cycle 2008-12-16-20-24 alternating low and high. Final low is expected this year.
After which the ratio will rise up until 2028.
Should 24 be challenged (supported by rising Gold prices), then P&F chart theory suggests that the bullish trend will target 48
It can be observed that EURUSD follows the same 4 year cycle. Therefore we are bullish on the European Currency.
Opening (IRA): GDX June 21st 24 Monied Covered Call... for a 22.83 debit.
Comments: Selling the -75 call against a one lot here out in June where I have covered calls at the 29, 27, and now 24 strikes. 1.17 max on BPE of 22.83; 5.12% ROC at max; 2.56% at 50% max.
Going monied CC here in lieu of an equivalently delta'd short put to take advantage of call side IV skew (39.6% on the call side; 29.18% on the put side at the 24 strike).
This is probably about as much BP I want to devote to a miners position, which I view as an indirect rate cut play with the notion being that the dollar weakens somewhat, gold strengthens, and miners indirectly follow with bets being that there's a rate cut in May. It may naturally end up being later; the market hasn't exactly been "spot on" with either the timing of depth of cuts of late ... .
Alternatively, GDXJ/GDX are at the top of my screener for 30-day IV, so I'm just going where the juice is at.
Consolidation Continues for Precious Metal Mining StocksGold miners have shown relative weakness to the metals since topping in 2020, and that looks likely to continue in the near term. However, when this consolidation completes, the mining stocks should once again shine and starts catching up, potentially in the next couple of months.
For this reason, the time has come to keep this group on your watch list as a bottom below the October 2023 level of 25.65 on GDX could prove to be a durable bottom that will serve as a base to move GDX back over the ~ 36 high, and could even see prices breaking over the 45.76 high from 2020. These would likely represent ~ 46% and 86% upside moves respectively, so well worth a long trade.
A bit more patience is needed until this group will be ready, but could coincide with a pullback in the market in the coming months.
The downside levels of interest are ~ 24.1-24.6, and 22.8 to look for evidence of a bottom formation.
Gold continues sideways consolidationGold will make new highs in 2024 once the fed pivots. Going into 2028 you will see gold continue to break records. The 2028 election will all be about the defecit and the debt. We won't make it to the 2030's without cutting spending, 100% of all tax receipts will go towards interest on the $46 trillion debt in 2028.
For now, Gold bulls just keep your toes in, if you're out, stay out. Wait for the micro indicators to turn around, a sustained GDX about 30 would be a good indicator.
Banks are shorting the SH ** out of gold so just be careful, but the inevitable is coming.
GDX Put credit spread at -1 sigymbol GDX
Open Date 11/9/2023
Put or Call Put
Expiry Date 12/22/2023
Short Strike 25
Long Strike 24
Price to Open 0.12
Min Width Multiple 2
Risk Ratio 7.33
Return on Risk 13.6%
Opening DTE 43
1 Day ROI% 0.32%
Max Annual ROI % 115.8%
GDX hit a -2 sig on the weekly timeframe back on Oct 4/5 just like a lot of stuff did.
Pushed up and took out the previous bearish selling range, dipping into the gap range sellside liquidity above Grey box.
Becaue it made such a V bottom and left so many 4h gaps, running over and through the bearish opposing gaps I think probabilities shift to Bullish continuation.
Also, the fact that it pushed back INTO the weekly VA in Blue and held there for about a month makes me think the liquidity is Higher and it's reaching for it.
This is a textbook setup for me, anticipating a -1 sig pullback and then the pricing algo steps in to push higher.
The morning open saw the dive down to engage a buyer, then pushed away for a few hours, then I entered on the first 5 min pullback.
However, the level doesn't seem to hold this morning and it's hunting for liquidity below on a gap down today.
Chose the 25 short strike as it's about 2.5 sig the expected excursion from the entry -1 sig.
I may sell more at the 24 strike if 26.60 is tested at -2 sig.
Right now, I anticipate the weekly -2 sig selling level in Green near 25.60 will cause a buying bounce, if not the Daily/4h buying at the Blue line -2 sig doesn't step in before.
This is all happening after Powell speech yesterday afternoon and the QQQ just keeps extending higher reaching for some sellside liquidity.