Gold Miners re-visited

A few weeks ago, I wrote on some junior gold miners and their MASSIVE recent false breakdowns.  Friday, we saw an attempted sell-off below key support in the group that failed.

The intraday chart in Gold Miners ETF GDX tells us a few things.  The impulsive rally after Friday morning’s sell-off was a strong signal from the group.

Although we see some very positive signs, let’s note that no rally is confirmed yet.  Price has failed to make a higher high or even a higher low.  Also GDX has also only rallied into downtrend resistance and the falling 5 day moving average.

Here’s a look at two the top holdings of GDX NEM and GG on a weekly timeframe.  One common theme: momentum divergences.

Here’s an updated look at some of those false breakdowns in junior miners from the original post.  

As you can see, they are holding the fake-break down levels for now.

The common theme across all of these charts is the absence of downside momentum.  That’s exactly what you want to see when looking for a market to turn from bearish to neutral / bullish.

Calling a turn in the group is pre-mature.  That said, there are many conditions lined up that suggest a major turn.  It’s worth watching GDX to see if a further turn is completing.  Risk-reward wise this is the most interesting group for investors in a choppy mess of a stock market.  

Thanks for reading!