Emotions are mostly just out of place in trading. They’re notoriously bad counselors. Nascent or lasting emotions such as greed/fear/unease/delight on achievements dilute the trader’s success and soundness because they undermine the intended neutrality on the market and its development.
They disturb the concentration to the essential corner marks of trading that consist of the complete submission under the auto-imposed rules and the rules of the applied trading system(s) as well as the rules of the money management.
Herewith I’m forced to admit that yesterday, on Saturday the following realizations caused a hefty brash onto my back. If it had still been Friday, for sure I would promptly have betted the ranch when I first surmised the virtually fantastic potential of the subsequent Gold Miners trade setup.
Blessedly it wasn’t Friday and thus no chance for regular trading, so I’m given time to commit to paper the following insights and trading instructions in a most exactly considered way - as I hope - and to inform you, too, gentle reader and GUNNER24 Trader in a timely manner about the most recent, abnormally bullish developments in the Gold Mining Stocks.
I headlined the following trade setup "The Gold Miners millionaire’s trade long-setup"
One of the reasons for this was certainly to catch your immediate attention, furthermore I wanted to couch in terms somehow the really mighty high profit potential the Gold Miners are newly promising now. Cause, by adhering now to the GUNNER24 Trading Rules risking a little more stake than we normally would – I don’t want to say that an all-in bet would be justified or necessary yet at this moment – I’m absolutely positive that some of the GUNNER24 Traders will have become millionaires through year-end respectively scooped a couple of additional millions into the trading account.
The Gold Miners millionaire’s trade long-setup
When it comes to analyze the Gold Miners I like best doing it by means of the HUI (NYSE Arca Gold BUGS INDEX). The last time I did so was in free GUNNER24 Forecasts Issue of 04/10/2016: "Gold Miners sounding the attack". Then I recommended to go plainly into the Gold Miners again. At that time, the HUI was at 194.07 index points, with absolute certainty having to rise to at least 217.50 and most likely to 225 points. The 225 are resistance magnet for the index in the monthly time frame, and this magnet would have had to be processed till end of April/beginning of May 2016.
Ultimately, the HUI topped out at 236.23 on 05/02/2016 starting a consolidation phase that ended at 194.64 on 05/25. On Friday, the index closed at 226.61 thus presently resulting this picture in the monthly time frame:
At the # 1 // January 2016 bear low, we start an up setup. The setup isn´t adjusted correctly upwards actually, I would like to show you where the most important rally driver is anchored. Strongest bull support + current rally support in the monthly time frame is a Rally Angle that can be anchored at the important square transition line at the upper end of the setup.
First, we see now that the Rally Angle supported the current uptrend in the monthly time frame at the February low (120.19 // 02/02). This very first test of the Rally Angle led to an absurdly strong = hefty bounce from the angle. Ultimately, the February candle closed near its high owing to the vehemence of the bounce. February was an extremely strong uptrend month by which for the first time the market participants were confirmed that a # 1 January bear low had to/might mean an extremely important low.
Now, at the current June low (198.86 // 06/01) the Rally Angle was newly tested most accurately. And again, the market pops upwards from the Rally Angle!
==> By the Friday performance it’s PROVEN that also the second test of the Rally Angle has triggered enormous upward power. Their sustainability is a different kettle of fish, for the time being. At once, we’ll see more about it.
OK. Briefly summarized: On the SECOND trading day of February (120.19 // 02/02), the HUI encountered the Rally Support, and an up-move began = First successful + powerful test of the Rally Angle.
On the FIRST trading day of June (198.86 // 06/01), the HUI encountered the Rally Angle support, and an up-move began = Certainly the second successful test of the Rally Angle.
Now, let’s adjust the up setup to the highest achieved Fib number within the current bull leg:
The first initial up impulse has ended at the 5 Fib number with the final May high. At the May high, a correction started. The May candle body is red but shows just a consolidation candle close below the bull highs.
==> A first up impulse orienting itself by the Fib number 5 tells us that the whole bull advance mainly wants to/might gear to the Fib numbers in respect of important turns and extremes…
According to the time factor interesting and now again rather conspicuous is the fact that the final May high = current bull market high was also made on the first trading day of the month (236.23 // 05/02)… As to turns/extremes, some important things seem to happen at the Gold Miners towards the beginning of month!
Let’s continue just considering the monthly GUNNER24 Supports and Resistances and relating them to the performance of the HUI.
What’s going to happen now according to price + time, in the very short term:
The HUI will reach = test now the May-high environment, at the latest within 5-7 trading days. That’s beyond doubt. It is because the HUI is presenting the necessary bouncing force that was released by the second test of the monthly Rally Angle.
So, within 5-7 days the HUI will have to reach either the Blue Arc resistance (at 235 for June) or newly the first square line resistance at 236.23.
After reaching the 235-236.23 Blue Arc + first square line it will have but a few options. These ones will have to be traded as follows:
Option A - Breakthrough: Since the HUI index PROBABLY is in the bad-ass rally mode again because it is mighty chased upwards by the Rally Angle – its currently most important bull market support – the 235-236.23 monthly resistance will succeed to be overcome ONGOING.
The result would be that in that case it will have to reach at least the 285 till August being then the 8th month of the bull market!
The 285 for August will be activated as next uptarget if the HUI presents the first daily close above 238.
==> Being overcome the 235-236.23 monthly resistance in the current daily upswing will activate the lower line of the first double arc as next uptarget for the bull run. Then the lower line of the 1st double arc magnet will have to be processed at 285 index points till August.
==> So, please buy a daily close above 238!!!! For the 285 to ensue till August.
I’m not at all a fan of buying new highs in the gold and silver sector. On the contrary, I hate this because my experience taught me that especially in the gold and silver sector 80% of these new highs turn out to be false breaks. Sucker highs! Just appropriate to fleece and gut the newbies and the overly greedy. Yet this time we’ll have to buy a possible new high cause the 285 are important in this following setup as well. And thereby, they’ll have to be reached in this run!!!
It’s always interesting again to see the accordance of the former crowd behavior with the "more prevailing" mass behavior of the traders + investors. In this forecast, applied as early as at the beginning of the current bull market the 285 were already identified as important bull market uptarget:
Watch the 285 main target at the 5th all-time high double arc resistance magnet within the 2003 top GUNNER24 Up Setup above. 285 wasn’t expected to be reached before February 2017. The fact that the 285 might now be reached in the 8th month of the bull already is an expression of the force and sustainability of the presently existing upwards power. Above, you also realize that the 225 was and keeps being an important future upmagnet that was pre-defined with the bear market low of the year 2000 already.
I think, that each quotation above 238 during the coming days will have overcome the 225 second target finally.
Now again the 5 Candle up, so you won’t have to scroll so much to and fro:
Let’s go on with the "Gold Miners millionaire’s trade long-setup" and the existing options of the market after being reached the 235-236.23 Blue Arc + first square line:
Option B - Pause/Rejection/Fake High at 235-236.23 Blue Arc + first square line:
The HUI doesn’t succeed in overcoming the 235-236.23 Blue Arc + first square line resistance environment sustainably. So, it is maybe retracing from the monthly resistance the coming days. Or it’s having a break there for a certain time. Or it produces a double high there and then beginning the next down move in the daily and/or weekly time frame.
Firstly: A rest resp. small retracement at or below 235-236.23. If we recognize that at the resistance magnet we won’t have to worry because of the possible long-position. A 10-20 pts pause/retracement for 5-10 days would only be the normal breather in the new rally move. It’s not that easy to overcome finally an important bull market high produced after a 5 Fib-number first up impulse. A pause there in the further course of June would only be normal and a natural behavior.
Secondly: The 235-236.23 bull market high environment was overcome on daily or weekly closing base, so we went long completely. But in the further course of June, the HUI wants to fall back again because it had wanted to produce a false high = Suckers High resp. wants to deliver its next deep correction in the daily/weekly time frame.
==> IN THAT CASE, AT MOST it MAY NEWLY reach resp. test back the RALLY ANGLE IN JUNE in order to turn upwards AGAIN AFTERWARDS IN SUCCESSION NEWLY TESTING AND THEN FINALLY taking upwards the 235-236.23 bull-market high environment!
The reason for this likely outcome is that the Rally Angle is currently subject to its SECOND test. The W.D. Gann rule is valid that important support angles – the Rally Angle is such undoubtedly – can technically never be broken with the second but at the very earliest with the third test. From the fourth test on, it’s going to become really critical with this support.
This THIRD test of the Rally Angle is thereby possible for the month of JULY AT THE EARLIEST. Thus, the stop-loss for the possible 238 long position ordered in June is at 196 for the month of June resp. at 215 for the month of July 2016!!!
So, I’d like to come to the end and to the reasoning of my thesis why I believe that this trade setup will have produced a couple of "millionaires" at the end.
==> I keep on thinking that the HUI bull market – I presumed so from the beginning – is supposed to last at least 13 (Fib number) months all in all. I mean, from the January 2016 low to an important (final???!) February 2017 up extreme.
Now I come to the conclusion however that according to the price factor, the bull market will have or want to reach = process instead of "only" 285 certainly the 372.74 upwards magnet…!
Somehow, this attraction price caught my eye because for the possible 13th month of this present uptrend there is a natural extension of the very first 5 month up impulse of the just current upmove there, namely the lower line of the 2nd double arc.
Lower lines of the 2nd double arcs are always a plausible cause natural up or down target for any countertrend move. It became exciting when I realized that the Rally Angle – having currently enormous support function for the HUI – is likewise situated at 372.74 index points for the month of February 2017.
Playing around a bit with the alltime-high (ATH) at 638.59 pts revealed that the enormously important 1*1 Resistance Angle ensuing from the ATH units with the lower line of the 2nd double arc AND the Rally Angle at 372.74 in February 2017. Hereby, one may become a little nervous.
Above all after becoming aware of the fact that the very first important monthly low after the ATH – the final low of the year 2012 that marked the end of the very first bear market wave after the ATH – is likewise situated at 372.74.
During my Gann career, I was seldom able to calculate resp. identify such an important magnet in the yearly and monthly that is supplied from an ATH + important bear market low (2016), an important yearly low (2012) as well as a current monthly support (Rally Angle) and a natural uptarget (lower line of the 2nd) of the present upmove (5 candle up), where time and price are thereby in perfect harmony. Wow!
==> I firmly believe actually that the HUI will and has to process the incredibly obvious up magnet in the yearly + monthly time frame at 372.74 till February 2017.
==> Balls to the wall - long in case of a daily close above 238 up to the 285!
==> Remember unconditionally – in order to extract the maximum out of this bull – not to go long just GDX, GDXJ, GLDX. As always, SILJ will outperform the Gold Miners. Take a little more chance with NUGT and JNUG up to 285.
And above all, invest widespread in individual Gold Mining stocks. Some leaders always outperform the respective benchmark index in a bull market. Scatter a little money into the Big Caps such as ABX, GG or NEM. Do your homework finding out which Juniors and Explorers feature better chart and bull patterns than the HUI or XAU do. Invests a lot into these frontrunners.
Go predominantly into the Juniors + Explorers with promising GUNNER24 Setups in the weekly or monthly time frame that clearly outperformed the HUI, XAU, GDX, GDXJ in the first upleg of this bull already. Go increased into the Canadians and Australians. And don’t forget the Silver Juniors!