Tuesday, 9 February 2016

GDX - daily reversal

With the precious metals reversing lower in the afternoon, the related mining stocks saw the first major net daily decline since mid January. The ETF of GDX swung from an intra high of $17.82, but settled lower by a very significant -4.0% to $16.77. Near term outlook is bearish as a retrace appears underway.

GDX, daily

GDX, monthly


Suffice to add, with gold/silver getting into seriously over bought territory - at levels not seen since Oct'2012, there was always threat of a reversal.. and we have seen that today.

Now it appears a case of GDX at least retracing to the 200dma - which is currently at $15.48.

Seen on the bigger monthly cycle, there is a clear attempt by the mining stocks to break out of the primary downward trend that stretches back to Sept'2011.

For me, I'd like to see at least a monthly close >$18 to give a provisional bullish signal.

To give strong clarity/confidence, I'd like to see GDX >$20. Until then... it could easily be just another tease, as the mining industry is yet to capitulate.

... and capitulation WILL happen, just as it must for the oil/gas sector.

*eyes on those gold/silver miners with large unsustainable debts.