Monday, June 9, 2014

Is GDX really in a bear flag?

I dunno. Does this look like a bear flag to you?

Sure looks like it, eh? We even have diminishing volume as it tries to rise.

But then I go and look at GDXJ and I see something different:

Looks like GDXJ has completely battled back from its drop. It's back over its EMA(16), it's back over its Bollinger mean, the violated support at ~$35 has been recovered, and there were two good days of buying volume to end last week.

I've been suspecting that the GLD break of support was a bullshit move, entirely caused by an OpEx smackdown. Certainly we haven't seen any follow-through at all, and if you've been following gold for the past few years you darn well know by now that violated support usually sees follow-through.

So maybe this breakdown in gold was a headfake?

Doesn't mean it'll go back up, of course. But it was instructive to watch for follow-through on the OpEx smackdown.

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