Wednesday, February 27, 2013
So is it a GDXJ bear flag, or not?
So is this a bear flag we're seeing?
The problem I have is twofold.
First, we know the miners were puked last week on desperation selling. The volume shows it, and the scuttlebutt seems to confirm it.
Second, not all the charts are conforming to the thesis.
For example, here's Silvercrest:
That's a mighty big bear flag, if it exists! What SVLC seems to hint is there was a massive puke on volume to $2.10, which has now been bought back. SVLC is back into its lightly downward sloping channel of 2013. A hold of $2.40 and the short EMA is positive here.
And here's Oceana Gold:
Again, it's kinda hard to draw a bear flag on OGC. In fact, it's also threatening to go positive on its short-term EMA.
So I'd explain the GDXJ chart as a massive oversell, which is now being digested. People bought back the easy stocks like OGC and SVL, and now the market is digesting. A bunch of dumb money was puked out by big doomer funds seeing redemptions, and now the market has to figure out what it wants to do next.
Just my own opinion.