Loading ...GDX Structure Remains Bullish
…at least to my eyes. A week ago I gave up my bearish H&S continuation pattern theory when prices gave us a false breakdown and then consolidated as a flag at the top of resistance where I decided to switch long for a nice quick 20% runup. Since that time we now see prices not just backfilling the gap left behind, but more importantly to me, doing so with a bullish structure (e.g. left leaning flags). The structure is very similar to what we saw in early August. Meanwhile the structure in DUST for instance looks quite bearishly configured with prices not managing to get past critical MA’s. To add additional texture here, gold remains above the 20MA and is now forming the exact bullish flag at DT resistance that I suspected it would last week. If gold close above 1140 on the daily there will be quite a bit of upside from there I suspect and the GDX will go along for the ride. Like many here, I too think the ultimate lows are not in but this just doesnt look like a likely setup for a huge breakdown and those lows to get inked. While I’m not saying that prices can’t move lower tommorrow, I just want to provide a voice that contrasts the uber bearishness that I’m reading on the board lately.
Mark. Good analysis. I cannot disagree with the technical case, however, the problem the miners have now is a very bearish setup in the general equities markets. If we get the big draw-down, which I am anticipating very soon in the general equities, the miners will get sold off, unless gold goes for a major run up, which looks unlikely, as everything gets sold in a crash sequence. Liquidity in the markets is now becoming an issue.
I can see a controlled demolition of all sectors playing out, and the miners will get hammered despite the promising technical picture. As I said, nobody gets out alive in a crash sequence.