Objective Trader by Doc Barter, 3/1/2013. This is an interesting way of looking at the price action of gold mining stocks, easily followed at StockCharts.com. The results could be applied to timing an etf such as GDX, although personally I prefer to wait for price to confirm a trend change.
Below Bullish Percentage Chart is showing the 13 EMA. Whenever the 13 EMA is crossed to upside ( buy signal ) or to downside ( sell signal ) we should follow the rule regardless of what we are personally thinking. Remember, the market is always right !
Since we have seen in the past how the bullish percentage does mark panic lows once the percentage has dropped to 5% or less, the odds to enter a trade and end the trade profitable over the next 3-4 month has increased dramatically despite the fact that the 13 EMA has not yet been crossed to the upside. The idea is to initiate a percentage of capital ( OT enters today 8% of 25% capital allocated to HUI Miners) at such panic levels ( FEAR ) and add more later with buy signal in BPGDM
Below Bullish Percentage Chart is showing the 13 EMA. Whenever the 13 EMA is crossed to upside ( buy signal ) or to downside ( sell signal ) we should follow the rule regardless of what we are personally thinking. Remember, the market is always right !
Since we have seen in the past how the bullish percentage does mark panic lows once the percentage has dropped to 5% or less, the odds to enter a trade and end the trade profitable over the next 3-4 month has increased dramatically despite the fact that the 13 EMA has not yet been crossed to the upside. The idea is to initiate a percentage of capital ( OT enters today 8% of 25% capital allocated to HUI Miners) at such panic levels ( FEAR ) and add more later with buy signal in BPGDM
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