Counter Trend Rally in a Bear Market, GDX Low Near?

By: Brad Gudgeon | Sun, Jan 24, 2016
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January 20th may have been an important intermediate bottom in the stock market, but the bear market is still growling. January 20th was exactly 100 trading days from the August 24th low. The 100 trading low has a variance of +/- 15%. Oddly, the 16 TD low, which arrived on January 11 is still due in early February along with a Bradley turn (Feb 3-5). The next top of import is due January 25 with the moon in Leo/Virgo. It is also the 16 trading top +1 TD. Last moon cycles saw the market run down 8 TD's to the moon in Sag/Cap (due Feb 4th). January 26 and 27 have the moon in Virgo, so at least those days should be down. Feb 1 is another day which should be down based on the negative astros on Jan 29 and over the weekend.

The e-wave look is also irregular since Jan 13th and not impulsive at all, which means we may make new lows in early February (although this is not certain). I think the best we can hope for is a lot of chop going into early February and perhaps higher prices into the second week of February before retesting the lows late in the month and then a strong countertrend rally into early April. Keep in mind that these are countertrend rallies. I believe this is a bear market that has much further to go to the downside!

As far as GDX is concerned, I believe we are close to bottoming on the 20 week lows due next week. The chart below is the worst case scenario with a move to $11.18 by week's end, but I believe the best case scenario has GDX tagging near to $12.14 by Jan 27th.

S&P500 Index Daily Chart
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Market Vectors Gold Miners Daily Chart
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Brad Gudgeon, editor and author of the BluStar Market Timer, is a market veteran of over 30 years. The subscription website is www.blustarmarkettimer.info
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Brad Gudgeon

Author: Brad Gudgeon

Brad Gudgeon
BluStar Market Timer
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eaglesoveramerica.com

BluStar Market Timer Investment Philosophy: The stock market is currently in a technical Elliott Wave Bear Market Rally. It has been exhibiting A-B-C type waves instead of the normal 5 Waves since the market topped in 2000. According to "The Original Works of R.N. Elliott", we are due for a move down to about the S&P 500 442/443 area in the next few years. In my opinion, this is no longer a buy and hold market, but a traders' market. We mainly swing trade the market with funds and ETF's, but otherwise trade according to the market's disposition and to the traders' discretion. For the year 2014, BluStar Market Timer is rated #1 according to Timer Trac. http://www.blustarmarkettimer.info

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