From yesterday on the GDX:
"The Bears took over from there and were able to send the GDX down through double validated support on a CLOSING basis. Oops!"
The Bulls paid the price for that "Oops!" at yesterday's Crash opening below the 61.35 low of the Head of the Inverse H&S bottom, which completed a Double Top at 66.98 and 66.90. Yesterday's high was 61.23, so The Bulls were locked out of the Double Top for the entire session.
Quite interesting how that broken Channel played out. Yesterday's move down wouldn't have been as much of a surprise if it had occurred after The Channel broke down on September 15. But, in her typical fashion, Ms. Market disappointed the greatest number of players possible by getting The Bears to cover their shorts on the move back inside The Channel and above 64.74-64.75 resistance, and by getting The Bulls to buy that breakout.
Wednesday's violation of double validated support on a CLOSING basis wasn't anything with which to be toyed. Those things usually have "some" significance, which is why I always try to type validated support and validated resistance in boldface.
That Crash Opening was so ugly, I at least wanted to consider the possibility of "some" gap fill in the GDX. As the morning progressed, the GDX was noodling around below 60.55-60.54 horizontal resistance (the horizontal white line) and the EMAs were flattening out, so I went ahead and bought 5,000 shares of it at 60.37 for a quick trade.
I got a momentary upside breakout (white arrow), to 60.63, but then the GDX fell back below 60.55-60.54...below my 60.37 entry...and, into the low 60.20's. No, thank you. I threw it in at 60.21 for an $800 loss.
FCX has been so badly bludgeoned since its breakdown from the 2011 Falling Wedge, I wanted to consider the possibility of a capitulation move down at yesterday's opening. I also wanted some evidence of that "possibility."
Early trading looked "Cup & Handle-ish." Some technicians would complain that the Cup is too "V-shaped" and that it should be more rounded, but we've seen many of those "V-shaped" Cups work out fine in the past. That didn't concern me at all. It had the right "look," with the Symmetrical Triangle "handle" (in yellow), and the EMA's were "in gear," properly threaded.
I got long 5,000 shares at 32.65. The highs of the Cup were 33.115 and 33.10, so The Bulls needed to get through there. They did, but...
...not for very long. On the pullback, 33.115-33.10 wasn't support, which I didn't like. The pattern in green looked like it "could be" a Bull Flag, so I gave that a chance to breakout. Another bullish pattern would have been nice, structurally. It dragged out for too long to be a Bull Flag, in my view, and my 32.65 entry was being threatened as the pattern progressed in desultory fashion. Given that I was long a stock that has been VERY bearish and that I was playing against the dominant trend, I wasn't inclined to give The Bulls any more time. I sold at 32.86 for a $1.050 gain.
After I exited (white arrow), FCX formed an even larger Channel (the pattern in blue), but The Bulls couldn't do anything with that one either. FCX traded sideways-to-down for the remainder of the session, as has been its wont lately.
Basis the daily chart, the 30.61 target that has been IN PLAY since the early August breakdown of the 2011 Falling Wedge came close to getting MADE yesterday. The session low was 30.97.
Anecdotally, when we talked about the Bearish Wolfe Wave breakdown in late July, which turned into a Bearish Tidal Wave, we discussed the fact that the hallmark of a Bearish Wolfe Wave is to get the proverbial "everyone" wrong-footed on the Fakeout Breakout to the upside, thinking that the stock is going much higher. That certainly was the case among the analyst community. It is said that, "They don't ring bells at a top," but an awful lot of analysts were "chiming in" with targets in the $70's, right at the top in late July ;)
Market lesson: "Play what you actually SEE a stock doing, not what you hear analysts saying that it will do."
Gain on the session: $250
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