Leaders look great having bounced to new highs of 9 dma trades in bullish fan patterns.  However, the sector isn't going anywhere without the larger caps participating.  ABX looks like an inverted h/s in the making, so we took off 1/3 (10 lots) the 26/22 March bull put spread we put on the last couple of days and put on a weekly (8 day) 23/24 short call spread (28c) on GDX (1/2 position, 20 lots).

Some of our best fills from this bounce are a GDXJ 26/22 March put spread for sold yesterday for 1.30 , which we repurchased today for 90c , a 40c or 31% overnight gain.  A gross dollar gain on a 10 lot is $400 for such a trade or 0.33% of a $120,000 portfolio.  A full position in the portfolio has been 30 lots, so when you start tossing 10, 20 , 30 lot spreads against the hedge of the long puts (30 lots of GDXJ May 28s - our "core" short positions) or the stock (core longs) positions (if shorting) it really adds up quickly.  This is trading "around a core" position rather than maniacally gap trading a hodge-podge of stocks against high-speed , high-frequency algos who've already taken off gains in the overnight markets.

We had a much better loop-de-do on this 7.6 % bounce the GDX, reaching nominal new highs from what I have noticed, touching up 22% (update ...23%).  We put on a boatload of bull put spreads Friday and yesterday into the lows.  Closed the weeklies at 50-60% gains, should've perhaps closed some monthlies too as we're up a lot on those in two days.

This bounce was pretty much expected, but the GDXJ drainoff was -13% this time vs. -11% last about.   About -9% and change on the GDX both times.   I expect this gap to fill before new highs, but a little reluctant to sell anymore calls at the moment.  Would love to see a little higher prices before moderately bearish moves.  RGLD and GOLD a couple making new highs, AEM and FNV about to join, RGLD looks great on any dip, eating bankster short contracts for lunch.   Yesterday was such a good entry that I think we go a little higher first, but that was a pretty deep hit on a lot of the littler guys.

Took a look back at actual price pct. moves in the 2013 and 2014 rallies on the bullish gold stocks we have in the model portfolio.   Several, like SMF.to, SBGL, RIOM, and I believe KGI.to did 150% or more.  I've shown NG in the spreadsheet in and a chart with trend / sym lines , which I think are geometric and show the actual pct. move. 

The 2013 move was about 83 pct. , and the 2014 move was about 123%, with no follow-on highs in May.  The projected prices I have been using are based on fibonacci extensions off the November 2014 lows.  Using the measurement lines with analogous price moves, we'd be looking at much higher prices (4.25 to 5.15 instead of 3.65) for NG, for example, in this move.  

It now looks to me like the 27 level on GDX is likely given the outperformance in this run and past performance.  Not too concerned about GDXJ lagging or gold leading - as a number of folks have pointed out, that occurred at the 2009 lows, too.

Very good entry points at the open as the 27 area gap on GDXJ did fill, by gully.  That was a 13% drain-off and a tap off the 20 dma.  I had sold 1/2 position of bull put spread   (15 lots) of GDXJ 27 / 22 March monthly expiry Friday.  Added a 5 lot 26 / 22 lot today near the open.  Those are all in the 1.25 to 1.5 credit area, which is our preferred method of booking credit / profit.  Stacks back some risk, but we are long May 28 puts on GDXJ.

Also had a 1/2 position of GDX weekly puts 21.5 / 20.5 from Friday, and put on another quarter (10 lots ) of a 21 /20 bull put spread today.  Rolled down the 21 Feb monthly protective put to 20 strike for 36c credit, and we left the 24 Feb short call to decay.   Bought a 1/2 position of KGI.to KGILF  (700 shares).   We had sold all our FNV, RGLD, HL and some DGP the last week or so and continue to rotate that cash into higher beta  for now.

Fib time series indicates a low on 1/28, this Wednesday, next time frame is out in the mid-March area, where we'd expect a spring high.  GFI nice 20 day / gap fill entry at the open.   The quick sharp   decline on relatively low volume looks fine, but should morph into a more consolidative fan than a continuation flag.  Hopefully those banksters,  are taking some quick profits on all those contracts.  Better yet, hope they booked some quick losses.   Stock charts just not extended and vulnerable enough yet to foresee the typical algo smear campaign.

1.  RGLD has moved 70 to 90 pct in last two years major rallies.  Up about 45% so far, projects to 90+ if that happens again.  SBGL has rallied more than 100% in each of those legs. 

Daily view of RGLD shows renewed leadership and upward grind even during the past few days of drain-off.

2.  Last year's action at this time very similar to what we saw this week , which led to a sideways consolidation into the 20 dma.

3.  A scan of the last week of hoop-te-do, which left the GDX up a mere 1.6%, shows most of the model portfolio up relatively well, with ten components up 4 to 21%.  Interestingly, the double silver ETF led the way.

4.  Some others we mentioned last week on the add-to / spec list, such as Kirkland, Pilot, and Tower Hill , had good performance in this period, THM up 25%.

5.  We put the screws on the portfolio a couple of days too early and missed capturing some upside.  However, we only pulled back about 3% the past few days.  We continue in a 24 / 21 GDX collar "full" position (40 lots) Feb monthly from last week.  This is now working well for us at 36 delta.  

Rather than blow out a lot of stocks this week, we paid 60c to move up the May 27 GDXJ , full position (30 lots) to the 28, which now are already in the money and at 46 delta.

So, my perspective is the leading stocks are all in high, very bullish consolidation patterns, but we are positioned to ride out this drain-off in good position.  We're already down about 10% from recent highs on GDXJ and 7.6% on GDX,.

From the way I have arranged this portfolio, this is a fairly aggressive buying opportunity today.  This is already a 9% giveback from the highest prints on the GDXJ.  I used some of my paper gains in the last spike to aggressively move up to the 28 long May strike.  We are also long the 21 Feb GDX puts.  Raised a bit of cash this week, too, but it is too early to blow out large chunks of the portfolio as many stocks as just basing nicely at the 9 and or 20 dma and appear to be prepping for another leg up.

We are using this dip to get out of some hairy short weekly calls.  Also, we are selling puts , 1/2 size 21.5 / 20.5 GDX next friday expiry for 29c, and 1/3 size GDXJ  27/22 for a 1.35.   I would be very surprised if the 27. 25 gap closes on GDXJ any time soon.

Leading stocks look fine.  HL not backing off at all.  I think a redraw of that shows a $3.88 target, which is more in line for the percentages we're looking for with some of these other stocks.   GFI , now strong buy anywhere here to the gap at 5.25.  SBGL just not going to go down,  I suspect, may drift to 9 dma.

Targets remain the same.  High pennants and even unconstrained breakouts.  In the oodel port,  SMF, HL, OCG, GUY.to , HL all continuing higher, SMF heavy buying on the dip yesterday.  LSG, RIOM.  GFI and NG powerful pennant patterns, they took a few days off as the pump and dump this week focused on GDX stocks moreso than the juniors.  I raised GDXJ puts to May, 28 strike price, very comfortable holding these stocks for continuation move or selling monthly put spreads on the dip.   GDX, GDXJ , 28 and 32% up from Christmas eve lows.  Scans are : 2nd from right, pct gain from 11/5 sector lows ; far right , pct gains from Christmas eve rally.

I think this has come up over the years, but does anyone have a script or canned tool which does dynamic calculations on , say, ((current price - current nine day moving average) / nine day moving avg)) = current % away from 9 dma. 

I'm going through a bunch of charts and doing actual calculations of pct away from 9dma.   For GDX, for instance, we've had 3 events already this year where we have been 7.5 to 11% away from the 9dma, which are tradeable events, if not to go all the way back to the 9, to at least skim off some weekly option premium as I'm doing in the GDXJ 2015 model portfolio (not too well the past).  I've typically been a day or two early.  In the future, I will be waiting for more extreme conditions and scale in 1/2 size.

Summary :  perhaps 3-4 weeks and $50 to go in current leg of gold rally.   Current portfolio outlook:Hold good stocks, buy dip around last Wednesday’s (1/14/15) nearly filled gap if we get there quickly.   25% upside remains for best GDXJ stocks, perhaps more in the thin speculative stocks.    Watch to see if slight earnings gap downs are bought. We still prefer beta / GDXJ as most are trading well vs GDX.   Long puts will be kept at about 10% below index strike at significant new highs (7-10% rallies), with shorter term opportunistic hedges on smaller surges either direction.

RECENT RALLY LENGTH AND DURATION IN GOLD The last two major rallies in gold (2013 / 2014) lasted $250 / 10 weeks and $200 / 12 weeks.  We are currently $150 and 11 weeks into this rally.   A 161 fib target is $66 higher.

Spring highs the in 2014 / 2013 both occurred in the 3/10 to 3/18 time frame.  2013 / 2014 lows were both around 11/23.

RSI daily readings reached overbought (70) and stayed / reverted to overbought for 3 to 5 weeks (that includes data on last 5 rallies of several hundred dollars).  This has happened earlier than in the past couple of years.    

STOCK PEAK VS GOLD GDXJ and GDX peaked pretty much the same time as gold in the last two major rallies, unlike other rallies in the past, where juniors diverged and headed lower much earlier.

PRICE PROJECTIONS GDXJ projects  to $33.44 about 15% higher with $1345 gold.  GDX, is a little harder to read as it seems to be outperforming.  Perhaps 24+ using symm lines.

Gold gains project to about 7.5% ; 2x ETF about 15%.  Any stocks held for duration of this leg should offer significantly more gains if held.

Top performing stocks projections

NG:  $4.65,  26.3% gain at 1345

SBGL:  $13.73 , also 26% or so.  Note, this stock did not leave the 9 day during the entire vertical rally to start off last year.

Others in our model portfolio that project more than double ETF, but slightly less than these two are:

AUQ, TOR.to, GUY.to.   These five we consider strong buys on any weakness.    RIOMis ok at about 19%, GFIand DGC.TO,  about the same.  

Silver stocks are mostly underperforming, but we will look to add to our ASM, which looks very good, and add SSRI, which has outperformed.      Given the price volatility of the metal, the 2x  ETF looks like it’s about as good as many stocks, unless one can get a pop in the smaller thinsters, which we aren’t doing too much in this portfolio.

Most of the outperforming stocks in the past month like IAG, KGC, AR.to, etc. look like mostly short-covering from tax loss selling.  They look ok, but not to outperform from here.   

The South African stocks look for real as long as oil is low and dollar is high.  SBGL has outperformed over the last two years without these factors.

This was posted here on 1/8/15:

"Ultrabullish 3 white soldierspatterns on this deep fakedown and breakup so buy dip aggressively. "

We got a sharp $1.70 drop in the GDXJ the next two days, then a $3.70 peak to trough follow-on to new highs.  Ruling on the posting is confirmed.

/gc hitting our 1280 target in accelerating fashion.   The banksters giveth $110 off the New Year's levels, they will certainly look to take some away.   We rolled up the 19.5 / 23 Feb GDX collar to the 21 / 24 strikes for an ugly 73c debit, but we are up a similar amount on the 25 / 21 Feb GDXJ bull put spread put on late Wed., so we can call it even for now for accounting purposes.  

We also have a 22 / 23 bear call spread on the GDX which is taking some heat, but at this very extended level, we'll worry about it next week.   Portfolio remains at about 20% up for the year.   Leadership in the GDXJ very extended as they reattack the 7/22/14 highs and gap area (SBGL, PVG etc.).  Lumpy GDX stocks now outperforming a bit as they load up on shareholder secondary funds and value fund buying.  We will use the pop here to sell underperforming HL at $3.01 (1800 shares), about 6% gain.  We will go shopping on the pullback with an equivalent amount of fiat (about $5400).

Patience and a little book lernin' ... overnight action mimicking the futs provided a nice base which got the ma's positively aligned on the 5 minutes, little pullback and entry point at 96.5 or so right off the open.

update: algo bears are tough... whipsaw , but potential to move stops twice from LOD, to break after first 5', then under 2nd five minute bar to stop out near breakeven b4 whipsawed out in weak market.

3 day ratio is down, which is what i think a lot of us are concerned about

Blobba has some work to do, but looks like a move above 98 with a futs pop would have things moving in the right direction.  Above avg ATR already.  Open gap at 100+ .  Nice 500k block there at the lows an hour ago.  

FYI the 97.08 tapped out my  buy alert for a 62 fib retracement of rally, AAPL almost at last weeks gap, w/ + divergence, don't think it will fill.

The miners are highly divergent with the metal here.  In my model portfolio, I won't sell / rotate  the long stocks until much higher prices, but I raised my protective puts 2 points, sold a weekly bear call spread, and put on a Feb expiration "costless" collar.  Looks like I was a little early as usual, but if this move higher in /gc didn't take the miners to new highs (a few have , SBGL, GOLD, GG.), it's hard to see this gap sustaining.  /gc has a fan line resistance here, and a fib line at 1280, which isn't far. 

I suspect we'll see a sharp gap down as the next fun times and should be positioned with a double dose of long puts and short calls.

I sold a bull put spread 25 / 21 Feb monthly for $1.10 near the lows on the GDXJ yesterday.  Had closed an intraday bear call spread early on as I mentioned.

Was expecting an overnight move through this area on the /gc , but just looking at the premarket levels on GDXJ , we're well below this weeks highs.  They'll have to scorch off the open to make new highs, or I will turn more bearish.

UPDATE:  Pretty languid action in the stocks, so I'm taking this opportunity to get out of the weekly GDX put spread at about breakeven (23c to cover), rolled up from 25 to 27 long puts (35 delta or so , debit 95c), and put on a weekly GDX call spread for 19c at the 22/23 strikes.  I don't expect gold to blast to 1280 on this move.  This is mostly a move to lock in gains with the long puts at the 27 level on GDXJ.  I'll consider slapping a collar back on if we move higher.

Portfolio back up at about 20% here in week 4.  We made a bit on the last two day selloff with some call spreads and a collar, but the we took a bigger but on the bullish side yesterday with that 25/21 bull put spread, which will pay for the 25 to 27 rollup today.

Update again:  Put on the 23 / 19.5 feb GDX collar that I had on briefly Monday overnight.  /gc hitting a 61 fan line resistance from last summer's highs.  A bunch of GDX stocks got technically smashed the past few days, and even the strong ones are not making highs / diverging with /gc.  Sold some double ETF for fiat for now, too.

No reason to be trading AUY.    All sorts of bad stocks get tossed out for trade ideas, but if you stick with more fundamentally sound stocks, you won't have a lot of these problems. 

And you don't need to listen to 100 conference calls.  The components of the GDX or GDXJ or GLDX , SIL , etc are all published.  These can be scanned over time frames at key inflection points (e.g.  since post 2013 crash, all of 2014, and off the Nov 4 2014 lows, or even the christmas eve pullback lows of 2014.  AUY was garbage on all those time frames.  And it drags down the index, which is why it's useful to short / hedge indices and go long outperforming stocks.

TC2000 makes this very simple.  I believe TOS now has custom date price analysis where it makes price comparisons a lot easier than it used to be.

looking to fade gap with 21.5 /22.5 gdx call spread 23c ... for a good time , not a long time.   /gc 1245 area too important to let it be breached in broad daylight.   That would be too ez

AKG orderly advance on volume this past week, added to yesterday from DGP proceeds.  Buy the dip.

update: filled at 14c for quick 9c on that i spent 200 akg

This is the trade I slapped on at the highs Monday, 1/12/15 at about 21.70 GDX for about 3c debit.   I closed it way too early this morning for minimal gain , but it's doing exactly what it was intended to do.   This screenshot shows it up 80c , which times 40 contracts would be 3 percentage points I could've drained off and put back onto long stocks.  Just this one trade allows one to stay long stocks, but profit from the selloff without using ETFs.