Monday, 24 October 2016

Miners digging deeper

Whilst the broader market closed moderately higher, there was notable weakness in the gold/silver mining stocks. The ETF of GDX settled lower for a third consecutive day, -2.0% @ $24.12. First soft support is the recent low of $22.50. Broader weakness to the 21/19 zone looks probable.

GDX, daily

GDX, monthly


With just six trading days left of the month, the miners are clearly struggling. August was a train wreck month, September saw a failing bounce, and we're currently set for a sig' net monthly decline.

The mining bulls can argue broad price structure is a multi-month bull flag. Any price action in the $17s or lower, would negate such a scenario.

Underlying MACD (blue bar histogram) cycle on the giant monthly cycle continues to tick lower. Even at the current rate though, a bearish cross is at least 3-4 months away.