Jeff Clark's Market Minute

Gold Stocks Are Poised for One Big Push Higher

The gold stock rally is hanging on by a thread.

But – and this is the important thing – it is still hanging on.

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We still have about two weeks left in the seasonally strong period for gold stocks. That period started in mid-December and it runs until mid-February.

The gold sector has done an admirable job of sneaking higher over the past six weeks But the rally has been stalling of late.

So, it might be worthwhile to take another look at the sector and see if anything has changed. Here’s an updated look at the chart of the VanEck Vectors Gold Miners Fund (GDX)…

GDX bottomed in mid-December, just like it did last year. Then it rallied sharply heading into January, just like last year. GDX then spent most of January grinding slowly higher and forming a pattern of higher highs and higher lows on the chart. It ended the month on a low note, closing just below its 9-day exponential moving average (the thin red line) – just like it did last year.

If the current gold stock rally continues to play out like the rally last year, then the next two weeks could be explosive for gold stocks.

GDX rallied nearly 8% in early February last year. A similar move this time around would have GDX trading as high as $25.50 by Valentine’s Day.

There are no guarantees, of course. Just because GDX is currently playing out the same script as it did this time last year doesn’t mean it will continue to do so.

But as long as GDX can hold above January’s low of $23 per share (on a closing basis), I like the odds.

If GDX closes below $23, then the pattern is broken. And the gold stock rally will probably be over. For now, though, the gold sector still looks good for the next two weeks.

Best regards and good trading,

Jeff Clark

P.S. We’ll keep profiting off the gold market’s rise week after week in the Delta Report, all while using low-risk setups with high upside.

To learn more about a subscription, click here.

Reader Mailbag

Today, remarks on a recent Delta Report gold stock trade…

No complaints from me. 152% on GDX calls in 13 days. I love trading in the bargain bin.

– Eugene M.

 

Jeff, thanks for the GDX calls trade. Maybe I’m starting to get the hang of it.

– Bob F.

 

Lifetime member. I lurk a lot. First message. Great call on GDX today.

You rock!

– Robert F.

 

And a question…

Jeff, I am a relatively recent subscriber and I’m enjoying your service very much appreciate your insight, humility, and perspective. Since you said your mailbag was pretty empty this week, here’s a question for you.

When you put out buy orders a lot of times the price moves away immediately. You’ve told us to wait and not buy above the buy-up-to price and that it will come back down once the market settles down. How long do we wait? One day? Two days? One week? Two weeks?

– Carl.

 

Jeff: Thanks for the question, Carl.

Trade recommendations that move out of range almost always come back into range within about two days. If a couple of days pass and it looks like most subscribers have not had a chance to get into the trade, then I’ll usually post an update in Delta Direct with instructions on what to do.

The longest we’ll hold out for a trade is about one week. After that much time has passed, it’s better just to move on to another.


If you have a trading story to share, or any questions or suggestions, don’t hesitate to send them in.

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Jeff Clark's Market Minute Archives

Jeff’s intuitive feel for short term market swings and his strong protective discipline have allowed me to lock in thousands of dollars in gains where I might otherwise have just ridden the markets up and down .”  -Chris, a reader and “seasoned investment advisor” from Seattle

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