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GDX trade ideas
Gold miners are on the cusp of breaking out of consolidationA follow up to Sunday's video on Gold, the commodity, GDX looks like it is almost ready to break out of this consolidation. The fundamentals are clear and suggesting you want to look to this sector now!
Hope you guys enjoy, I would love to hear all and any feedback.
Have a great day all!
GDX - Another Challenging ReadNot sure what to make of this chart. The FIB 62 support has held for 15 months at a touch over 21. Not sure what to make of the shorter term support in place for this year but if the overall market keeps moving up the miners may need to come down and test the FIB 62 again.
GDX Miners CautionHere's my 2 cents on the miners. Based on the last 7 months or so, it looks like we had 2 cycles and are currently in a 3rd. They range about 109-137 days. In each of these waves you can see three minor waves. If we are currently in the 3rd wave of the 3rd cycle then I would expect it to be LT and drop fairly soon. It shouldn't take out the highs of April unless there is a new trend higher happening? The peaks at "1" have each been lower than the previous, where the lows have all been about the same. I'm really not sure what to make of all this, just sharing...........
GDX SEPT 21ST 20 LONG PUT/23 SHORT STRADDLE/26 LONG CALL DOUBLEThis a continuation of a trade that started as a put side net credit diagonal. With the underlying chopping along nicely in a fairly tight range, I figured I'd add a short call aspect to beef up the credit received on roll, increase theta, as well as to smooth out/neutralize the delta in the setup. For lack of a better label, it's basically a "Calendarized Iron Fly." In a normal iron fly, all contracts are in the same expiry, with the short straddle body of the setup at the money, and the "wings" camped out in the 10-16 delta range.
Here, however, I've opted to buy long-dated wings to budget the buying power devoted to the trade over time and avoid having to leg into and out of the longs, paying for them once and avoiding repetitive commissions/fees associated with legging in multiple times. The downside of doing things that way, however, is that you're paying for more extrinsic in long-dated options that, in all like likelihood, will become "throwaways." Naturally, you can go wider with the wings to lessen that effect ... .
In any event, the current scratch point of the entire setup is a 1.14/contract credit. I'll continue to roll the short straddle, only instead of waiting for 50% of max, I'll roll at 25% ... .
Just a little more patience until it's time to buy the Miners?Either the gold miners will drop to the bottom of the triangle consolidation before starting their next run, or they will break out of the triangle without touching point E. If the latter happens, watch for the fake out - break out. Otherwise, it may be a good time to catch this run while the stock market is in a sideways consolidation phase for a few months. I would buy at E, or after a confirmed breakout of the triangle.
GDX / GLD Ratio GDX continues to outperform GLD .
This isn't what happens before a big $gold selloff.
Most likely, this is an advance-warning of gold's impending breakout.
