26Dec10:44 amEST

It's a Fugazi

It is often said that from failed directional moves in the market, or false breakouts, come aggressive moves in the other direction. With this in mind, we will update two charts in our ongoing analysis about whether they have just seen, in fact, false (or fugazi, as Donnie Brasco would say) breakdowns. GoPro is a chart I presented as a short setup for many weeks, starting in November with those series of lower highs and tons of complacent momentum traders in the name. Since then, the stock broke below $70 and washed out, trapping traders without the discipline to fold their losing hands. Recently, though, GoPro staged a false breakdown of the "bear flag" pattern I have highlighted for you on the first daily chart, below. As I noted before Christmas, the $70 level is going to be key. The first touch off of it was faded this morning. But I am looking to see if the stock can first base out a few days into next week, setting up a potential long back over $70. In addition, the precious metals and miners are having a good morning, with junior gold miners leading. On the second daily chart, note the gold ETF also sporting what could be a false breakdown of the bear pennant. If so, then gold and the miners could easily be posted for an aggressive move higher from gold's false breakdown. I have been profiling the bullish divergences building in the complex for a while now, amid negative sentiment and a strong U.S. Dollar to boot. GPROGLD

Christmas Collage Illusions of an End of Year ...


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