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Brad Gudgeon

Brad Gudgeon

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…

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

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
BluStar Market Timer offers auto-trading for those who don't have the time or inclination

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