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Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

Junior Gold Mining Stocks Setting Up For Another Rally

Commodities / Gold and Silver Stocks 2020 Jan 22, 2020 - 04:36 PM GMT

By: Chris_Vermeulen

Commodities

Our recent research suggests the US stock market may be entering a period of volatility that may include a broad market rotation/reversion event.  We believe this volatility event could begin to happen anytime over the next 10 to 30+ days.  The rally in the US stock market ending 2019 and carrying into 2020 appears to be setting up a “rally to a peak” type of price pattern. Please take a minute to review the following articles we’ve posted recently about this topic and how it relates to opportunities in Metals/Miners.

January 20, 2020: Q4 EARNINGS SETUP THE RALLY TO THE PEAK

January 15, 2020: SHIFTING UNDERCURRENTS IN THE US STOCK MARKET

The potential for a volatility spike resulting from a price peak formation (see the January 20, 2020 article above), could setup a moderately broad downside price reversion event that may prompt a 5% to 8%+ downside price correction.  If that happens, as we expect, over the next 5 to 10+ trading days, then precious metals and miners should explode to the upside as a “risk-on” trade moves capital into the metals market.


We believe the Miners (both Gold and Silver) are setting up for an explosive upside price move over the next 60+ days.  The reality of the global markets is that it appears to be setting up in a very similar manner to what happened in the late 1990s.  The rally in Rhodium, Palladium and Platinum are similar to the rally that took place in the late 1990s – just before the real explosion in Gold and Silver began in 2003-04.  The rally in Gold and Silver took place after a collapse event in 2000-2001 and setup a massive upside price event for Precious Metals and Miners.  You can read more of our research below.

January 16, 2020: PLATINUM BREAKS $1000 ON BIG RALLY AND WHAT IS NEXT

December 30, 2019: METALS & MINERS PREPARE FOR AN EARLY 2020 LIFTOFF

GDXJ 10 Minute Chart (1 Month Data View)

If we start with the shortest time frame analysis of the gold miners you can see a lot of measured moves based on technical analysis that has taken place in the last month of trading and it’s not far from over based on this chart.

Daily GDXJ Chart

The setup in GDXJ is that Junior Gold Miners should move 15% to 25% higher over the next 30+ days on a price reversion event in the US stock market.  We believe the upside target for GDXJ is $46 to $51 from the current levels near $41.50.  After a brief pause near $50, GDXJ should attempt another rally to levels above $65 to $70 sometime near June~August 2020.

Weekly GDXJ Chart

This Weekly GDXJ chart highlights what we believe will happen over the next 6+ months.  The opportunity for skilled traders at this level is incredible.  Support near $35.50 has recently been retested and held.  Any entry below the $40 level is an incredible opportunity to catch this upside price move.

Concluding Thoughts:

We believe the US stock market will enter a period of volatility over the next 30~60+ days and that volatility will push metals and miners higher into this next wave of advancement.  Be prepared for Silver and Silver Miners to rally more than Gold/Gold Miners (potentially).  We’ve highlighted how Silver tends to rally a few months behind Gold when a Risk-On trade sets up.

As a technical analysis and trader since 1997 I have been through a few bull/bear market cycles, I have a good pulse on the market and timing key turning points for both short-term swing trading and long-term investment capital. The opportunities are massive/life-changing if handled properly.

2020 is going to be full of incredible trading opportunities for skilled traders.  We’ve already set up a number of active trading triggers for our members to profit from the early moves in 2020.  This Gold Miners trade is an incredible opportunity for anyone skilled enough to take advantage of it. Visit Technical Traders Ltd. to learn how we can help you find and execute better trades in 2020.

Join my Wealth Building Newsletter if you like what you read here and ride my coattails as I navigate these financial markets and build wealth while others lose nearly everything they own.

Chris Vermeulen
www.TheTechnicalTraders.com

Chris Vermeulen has been involved in the markets since 1997 and is the founder of Technical Traders Ltd. He is an internationally recognized technical analyst, trader, and is the author of the book: 7 Steps to Win With Logic

Through years of research, trading and helping individual traders around the world. He learned that many traders have great trading ideas, but they lack one thing, they struggle to execute trades in a systematic way for consistent results. Chris helps educate traders with a three-hour video course that can change your trading results for the better.

His mission is to help his clients boost their trading performance while reducing market exposure and portfolio volatility.

He is a regular speaker on HoweStreet.com, and the FinancialSurvivorNetwork radio shows. Chris was also featured on the cover of AmalgaTrader Magazine, and contributes articles to several leading financial hubs like MarketOracle.co.uk

Disclaimer: Nothing in this report should be construed as a solicitation to buy or sell any securities mentioned. Technical Traders Ltd., its owners and the author of this report are not registered broker-dealers or financial advisors. Before investing in any securities, you should consult with your financial advisor and a registered broker-dealer. Never make an investment based solely on what you read in an online or printed report, including this report, especially if the investment involves a small, thinly-traded company that isn’t well known. Technical Traders Ltd. and the author of this report has been paid by Cardiff Energy Corp. In addition, the author owns shares of Cardiff Energy Corp. and would also benefit from volume and price appreciation of its stock. The information provided here within should not be construed as a financial analysis but rather as an advertisement. The author’s views and opinions regarding the companies featured in reports are his own views and are based on information that he has researched independently and has received, which the author assumes to be reliable. Technical Traders Ltd. and the author of this report do not guarantee the accuracy, completeness, or usefulness of any content of this report, nor its fitness for any particular purpose. Lastly, the author does not guarantee that any of the companies mentioned in the reports will perform as expected, and any comparisons made to other companies may not be valid or come into effect.

Chris Vermeulen Archive

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