Loading ...GDX daily – BUSTED
Rising Wedge breakdown OR Busted Ascending Triangle regardless of how you spin it, GDX looks ugly.
NOTE- You can see the same pattern on gold futures chart, except the wedge hasn’t broken/busted yet. Will it follow? USDJPY may be the answer.
As far as today goes, it seems the miners are selling regardless of USDJPY action(or maybe just leading it). But USDJPY is looking weak now with the overall market, and as we know, it’s about to make a big move out of this wedge. So a downward move on USDJPY could end up adding some cushion to gold/miners and determining how far they fall.
Interesting comments from Avi in his recent post below. If he is right this could be a big shake off phase. You need to be brave to keep buying or step out so it is a tough time to be in PMs. Still holding my core miners but not adding yet.
AVI Post:
As I noted this past week in our mid-week update, since the market bottomed almost a year and a half ago, every pullback we have seen has been quite deep. It seems that they have been almost “designed” to scare people out of the market by making them believe the bear market has returned. However, as this bull market progresses, pullbacks will become very shallow. This will cause the parabolic runs we often see in the metals complex, as investors will be forced to chase price, since they have now been trained to look for deep pullbacks. While I am not certain that this is what we will see for the pullback we may soon see, I think we have to be watchful for this potential.
Now, once all the products in this complex prove themselves to be within the heart of a 3rd wave up, then I think we can begin to trade this complex much more aggressively to the long side. But, until that happens, there can still be some pitfalls which can push out that break out a bit longer in time. So, I will reiterate my warnings about being over-leveraged in this complex (by using leveraged ETF’s or aggressive options strategies) until the market has proven itself.