The precious metals and miners have seen a rip-roaring rally over the past several weeks, finding support right where they needed to not long after I published this post about major support levels last spring. As you can see below on the weekly timeframe for GDX, ETF for the gold miners, most of the losses from last March through May have now been recovered with a virtual straight-line rally.
The gold miners have now returned to the site of their breakdown and the likely scenario is some digestion in the coming weeks. Of course, gauging the nature of the consolidation is going to be the key in terms of whether to embrace the bull case going forward for a sustained mover higher, versus the bear thesis that this late-summer move has been a mere gap-fill before we roll over to make a new low.
Bulls want to see some of that mild consolidation that equities as a whole have enjoyed since August after the rally, while bears want things to get naughty with vicious price swings and notable upticks in selling volume.
Given the broad-based strength with potent buy volume in the metals and miners as a whole, I am inclined to look for the bulls to continue to wrestle back the initiative with an overall mild consolidation. At that point, I would be stalking entries for long swing trades looking for a secondary move higher.
5 Responses to It’s On, Now
Now THAT’S a cute kitten
Thanks chess. This is very important to me. I almost missed it.
Pingback: Assessing the Wounded Prey | chessNwine