{"id":4313,"date":"2015-02-11T10:14:42","date_gmt":"2015-02-11T15:14:42","guid":{"rendered":"http:\/\/www.morpheustrading.com\/blog\/?p=4313"},"modified":"2015-03-05T07:03:32","modified_gmt":"2015-03-05T12:03:32","slug":"gdxj-gold-miners-etf","status":"publish","type":"post","link":"https:\/\/morpheustrading.com\/blog\/gdxj-gold-miners-etf\/","title":{"rendered":"Why Ride The Roller Coaster When You Can Buy A Gold ETF?"},"content":{"rendered":"<figure id=\"attachment_4320\" aria-describedby=\"caption-attachment-4320\" style=\"width: 300px\" class=\"wp-caption alignright\"><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-4320 size-medium\" src=\"https:\/\/www.morpheustrading.com\/blog\/wp-content\/uploads\/2015\/02\/hersheyj14-300x159.jpg\" alt=\"Wildcat roller coaster\" width=\"300\" height=\"159\" title=\"\" srcset=\"https:\/\/morpheustrading.com\/blog\/wp-content\/uploads\/2015\/02\/hersheyj14-300x159.jpg 300w, https:\/\/morpheustrading.com\/blog\/wp-content\/uploads\/2015\/02\/hersheyj14-110x58.jpg 110w\" sizes=\"auto, (max-width: 300px) 100vw, 300px\" \/><figcaption id=\"caption-attachment-4320\" class=\"wp-caption-text\">Wildcat @ Hersheypark<\/figcaption><\/figure>\n<p>I grew up in York, Pennsylvania, which is only about a thirty minute drive to Hershey, home of America&#8217;s favorite chocolates.<\/p>\n<p>As a teenager, I used to love visiting <a title=\"Hersheypark\" href=\"https:\/\/www.hersheypark.com\" target=\"_blank\" rel=\"noopener\">Hersheypark<\/a>, a pretty cool amusement park on the Hershey grounds, specifically to ride the roller coasters.<\/p>\n<p>As a middle-aged adult with responsibilities, I rarely get the pleasure\u00a0to visit Hersheypark these days, but lately I&#8217;ve been getting plenty of thrills and chills from the stock market alone.<\/p>\n<p>Lately, the\u00a0S&amp;P 500 Index has been a roller coaster with lots of hills and valleys, but ultimately looping back around to the starting point\u00a0(though may soon break out above the range if current price holds).<\/p>\n<p>Although day to day volatility has been pretty substantial in the S&amp;P 500, the benchmark index has merely been oscillating up and down in a wide, sideways range over the course of several months:<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone wp-image-4319\" src=\"https:\/\/www.morpheustrading.com\/blog\/wp-content\/uploads\/2015\/02\/150210SPY.png\" alt=\"$SPY S&amp;P 500 daily chart\" width=\"553\" height=\"371\" title=\"\" srcset=\"https:\/\/morpheustrading.com\/blog\/wp-content\/uploads\/2015\/02\/150210SPY-110x74.png 110w, https:\/\/morpheustrading.com\/blog\/wp-content\/uploads\/2015\/02\/150210SPY-300x201.png 300w\" sizes=\"auto, (max-width: 553px) 100vw, 553px\" \/><\/p>\n<p>When stocks are so indecisive on a day to day basis, it may be a decent market environment for daytraders who exit all their positions by every day&#8217;s close.<\/p>\n<p>But it has admittedly been a challenging environment for trend traders who typically hold stocks for weeks to months.<\/p>\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-custom ez-toc-container-direction\">\n<div class=\"ez-toc-title-container\">\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">TABLE OF CONTENTS<\/p>\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/morpheustrading.com\/blog\/gdxj-gold-miners-etf\/#Gold_%E2%80%93_Low-Correlation_Trading_Solution\" >Gold &#8211; Low-Correlation Trading Solution<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/morpheustrading.com\/blog\/gdxj-gold-miners-etf\/#Dont_Cross_That_Line\" >Don&#8217;t Cross That Line<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/morpheustrading.com\/blog\/gdxj-gold-miners-etf\/#Go_Confidently_But_With_Vigilance\" >Go Confidently, But With Vigilance<\/a><\/li><\/ul><\/nav><\/div>\n<h2><span class=\"ez-toc-section\" id=\"Gold_%E2%80%93_Low-Correlation_Trading_Solution\"><\/span>Gold &#8211; Low-Correlation Trading Solution<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Without even looking at a chart, I can tell you one of the best things about trading a\u00a0Gold ETF or the spot gold futures is that the shiny yellow metal is typically <strong>not closely tied to the day to day movement in the stock market.<\/strong><\/p>\n<p>As such, the challenge of the roller coast stock charts becomes a moot point and it only comes down to a matter of making sure gold is sitting a technically buyable level.<\/p>\n<p><em>Is it?<\/em><\/p>\n<p>Right now, select gold ETFs are indeed presenting low-risk buy entry points, but the patterns will soon lose their bullishness IF gold shares do not catch a bid and start rallying again within the next few days.<\/p>\n<p>The two main ETFs we trade are SPDR Gold Trust ($GLD), which tracks the price of spot gold futures, and Junior Gold Miners ($GDXJ), which is comprised of a basket of smaller gold mining stocks.<\/p>\n<p>Between the two, $GDXJ has clearly been showing relative strength to $GLD, so the Junior Gold Miners ETF has\u00a0better odds of rallying to a new swing high before $GLD.\u00a0Take a look:<\/p>\n<p><a href=\"$GDXJ gold miners chart\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-4318\" src=\"https:\/\/www.morpheustrading.com\/blog\/wp-content\/uploads\/2015\/02\/150209GDXJ.png\" alt=\"150209GDXJ\" width=\"553\" height=\"518\" title=\"\" srcset=\"https:\/\/morpheustrading.com\/blog\/wp-content\/uploads\/2015\/02\/150209GDXJ-110x103.png 110w, https:\/\/morpheustrading.com\/blog\/wp-content\/uploads\/2015\/02\/150209GDXJ-300x281.png 300w\" sizes=\"auto, (max-width: 553px) 100vw, 553px\" \/><\/a><\/p>\n<p>In late December, $GDXJ made a sharp move off the lows that lasted three weeks.<\/p>\n<p>Since peaking in late January, the ETF has been in pullback mode, and is now holding above its 50-day moving average (teal line), but stuck just below resistance of its 20-day exponential moving average (beige line).<\/p>\n<p>After $GDXJ pops back above its 20-day EMA (above the $27.60 area), <strong>buyers should step in<\/strong> due to break of key moving average resistance, as well as a break of the downtrend line from the January high.<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Dont_Cross_That_Line\"><\/span>Don&#8217;t Cross That Line<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>The first pullback to a rising 50-day moving average after a couple months of bottoming action is bullish, and typically presents a low-risk buy entry point.<\/p>\n<p>In this case, further support is provided by the highs of the last base (resistance always becomes support after the resistance is broken).<\/p>\n<p>However, <strong>all bets for another rally are off if $GDXJ fails to hold above its 50-day MA,<\/strong> which is definitely the &#8220;line in the sand&#8221; with this setup.<\/p>\n<p>Furthermore, this trade setup will <em>no longer be appealing if $GDXJ does not\u00a0wake up<\/em> and rally above the highs of its recent range within the next few days.<\/p>\n<p>Pullbacks off the highs that are succeeded by tight-ranged price action should snap back quickly after shaking out the &#8220;weak hands.&#8221;<\/p>\n<h2><span class=\"ez-toc-section\" id=\"Go_Confidently_But_With_Vigilance\"><\/span>Go Confidently, But With Vigilance<span class=\"ez-toc-section-end\"><\/span><\/h2>\n<p>Given the lack of follow-through in the stock market lately, we are pleased\u00a0that the chart pattern of this low-correlation ETF is\u00a0presenting traders with such a\u00a0low-risk buy entry point.<\/p>\n<p>Still, we must remain vigilant with <em>all\u00a0<\/em>new trades now, and not be afraid to quickly scratch the trade, or bail for a small loss, if this gold mining ETF does not catch a bid soon.<\/p>\n<p><em>If you&#8217;re tired of riding the stock market roller coaster and are looking for sound, short-term trading alternatives, <strong><a title=\"The Wagner Daily - signup link\" href=\"https:\/\/www.morpheustrading.com\/services\/swing-trade-alerts\" target=\"_blank\">subscribe now<\/a><\/strong> to\u00a0receive our exact entry, stop, and target prices for this $GDXJ trade setup (and others like it, sent to you every night).<\/em><\/p>\n<div class=\"cfmonitor\" style=\"padding-top: 30px;\"><center><script src=\"\/\/pagead2.googlesyndication.com\/pagead\/js\/adsbygoogle.js\" async=\"\"><\/script><!-- Footer of content - Large --> <ins class=\"adsbygoogle\" style=\"display: inline-block; width: 336px; height: 280px;\" data-ad-client=\"ca-pub-7565144363001883\" data-ad-slot=\"6017996961\"><\/ins><script>\/\/ <![CDATA[\n(adsbygoogle = window.adsbygoogle || []).push({});\n\/\/ ]]><\/script><\/center><\/div>\n","protected":false},"excerpt":{"rendered":"<p>I grew up in York, Pennsylvania, which is only about a thirty minute drive to Hershey, home of America&#8217;s favorite chocolates. As a teenager, I used to love visiting Hersheypark, a pretty cool amusement park on the Hershey grounds, specifically to ride the roller coasters. As a middle-aged adult with responsibilities, I rarely get the [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":4315,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_links_to":"","_links_to_target":""},"categories":[5],"tags":[],"class_list":["post-4313","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-stock-picks-analysis"],"_links":{"self":[{"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/posts\/4313","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/comments?post=4313"}],"version-history":[{"count":0,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/posts\/4313\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/media\/4315"}],"wp:attachment":[{"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/media?parent=4313"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/categories?post=4313"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/morpheustrading.com\/blog\/wp-json\/wp\/v2\/tags?post=4313"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}