GDXJ Inverse H&S

GDXJ Inverse H&S (Red Neckline)

GDXJ Inverse H&S (Red Neckline)

GDXJ has an inverse H&S bottom on its long-term charts (red neckline).  It’s also formed a megaphone off the bottom (blue) and just put in the retrace to VWAP that makes the megaphone legal for an upwards breakout.

That means GDXJ could head straight up from here for a breakout from the inverse H&S, with a target of roughly 100 (green scenario).

The purple scenario represents a triangle right shoulder on GDXJ’s inverse H&S, with follow-through on a larger inverse H&S set-up.

The orange scenario represents a breakdown through the blue megaphone VWAP for a new low near zero.  The odds of this are extremely small.

The pink scenario represents a false breakout through the red inverse H&S neckline to put a megaphone right shoulder on the formation.  If you see GDXJ reenter the inverse H&S after a small breakout, get ready to buy the dip just below 25.

The longer GDXJ spends down here forming a right shoulder, the more likely it is to break out quickly through 100 when it finally heads up.

8 Comments (To enlarge images, right click on image & then click "view image") → GDXJ Inverse H&S

  1. Snake Oiler

    Thanks for this (appreciate everyone’s inputs). I now see what’s going on in these gold miners. It looks more orderly than Economic stats that fluctuate like a nate silver forecast.

    Are pattern confirmations ever strong setups by themselves just for playing a mandatory retrace/touch? On a smaller timeframe, I’d expect to see some small breakout to play, but it’d be nice to just leave standing orders at a daily chart level.

    I thought you might enjoy this discussion by Rickards about why your setups continue to work.

    https://itunes.apple.com/us/podcast/the-gold-chronicles/id980027782?mt=2#episodeGuid=http%3A%2F%2Fwww.physicalgoldfund.com%2F%3Fpost_type%3Dpodcast%26p%3D1089

    15:30- complex system intro
    18:09- adaptive behavior
    19:30- druckenmiller example

    Reply
        1. ewtnewbie

          Yup, I listened to the last episode and found what you were referring to. Not an iTunes subscriber, so didn’t have the ability to easily move around, etc… I just waited 15 minutes and got the good stuff you were talking about. Thanks for posting. Sorry I made it more difficult than it had to be!

          Reply
          1. Snake oiler

            Glad you liked it. Can’t discuss Sornette without complex systems. The funny thing about complexity theory is that it originated with Soviet scientists who probably had to limit their findings to non political conclusions.

            Reply

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