MV Mailbag: GDX Looking Like Solid Gold

Jeffrey Cooper  Jun 23, 2009 1:00 pm

MV Mailbag: GDX Looking Like Solid Gold
 
Miners mean more beta.
 

Professor Cooper,

I don't see any reason to buy the Goldminers ETF (GDX). What were you looking at on that
trade?

Thanks,
Minyan Jim


Dear Minyan Jim,

The GDX offers more beta than the Gold ETF (GLD) typically does.

But here's a chart of GLD from my morning report, which shows some of my thinking.



GLD has undercut its 50-DMA, and has marginally undercut last week's low. It may therefore trace out a "Soup Nazi" buy pattern, stabbing back up through that low.

In addition, the GLD may be tracing out a cup-and-handle pattern. Fundamentally, gold may move in advance of the Federal Reserve's meeting this week, at which they will discuss their latest salvo in the war on deflation.

Sincerely,
Professor Cooper
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Comment (1) See All Comments »
06-23-2009, 2:21 pm
Jeff, you use some particular jargon for the "Swing" and "Wheel of Price and Time" trades for which definitions have been difficult but not impossible to find.

You got me here.
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