PMs are in a down trend. Each time they have gotten up to a certain level as defined by a MA or some other technical indicator, the sellers have emerged and started selling. GDX made it up to its 20d-VWMA and GDXJ exceeded the VWMA so time for the shorts to take a shot at PMs to the downside. The trend is your friend? ;)
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Now once the shorts start the beatings a break down through lower levels triggers a bunch of stops and leads to cascade drops. So the question is was this move up purely a momo play, a play by those playing the technicals off the early March washout, or was it stronger hands?
Not surprised that some ST traders took profits here especially if they bought that washout low of 3-March. If it was purely traders then we should see another washout and new lows - rinse and repeat.
Easy money trading the traders for the last 5-6 months and riding the fear as the Hedgies get flushed out of PMs. But if we do have some sector rotation going on the dip will be shallower. Convincing signs of buying on this dip should be heeded as a decent sign of an up turn or change in trend. Won't take much to spook these ST trading shorts in to capitulation. They aren't heros or doing God's work, they are looking for a quick buck on fears. If that doesn't materialize, they'll get out of the way pretty quickly.
But alas, with the Apr OI in its waning days, we'll look to see if we get rotation into the Jun OI or if it is Aug OI, or none. Boyz were clear this AM on their intent - bash the HUI leaders down early. You could see it in a broad look at PMs: ABX, NEM, GG, EGO, KGC were all down fractionally while the mid-tiers and juniors were finding residual buying from yesterday's mini short squeeze in POG. So the mission today - book some ST profits and get the fear and nausea going again in the PMs. Let the fear from the PMs help build some selling in the yellow metal.
Boyz did and OK job of rejecting any push above 1600 today. They just needed to hold the line and keep it held back. Do that a few days and then organize another push toward the bottom.
So just mho, fwiw. Nada!
Anybody see a different scenario in the cards here? |
