Friday, November 11, 2016

Downside support for GDX is not $22. Here's why.

I strongly suspect that support for GDX is not $22. Here's why.

When GDX pivoted back up from $22 back in late May, it was actually only testing the support of the SMA(50). It had no interest in the price level, it was looking at trend. Since August, GDX has failed to retake the SMA(50) three times, and that bodes ill for its future.

And your actual price-volume cluster happened through March around $19-$20. That was when the gold miner comeback story started to gain traction.

The gold miners have been overbought relative to gold (look at the upward-trending GLD:GDX) since the August gold peak. They need to work off more than 5%.

And all the "blah blah inflation" yabber in the market now, after years of "blah blah deflation", means an awful lot of money has still to rotate into something new, and a lot of the money is still able to take profits on gold miners, and so it will.

And copper needs to get beaten down from its silly position, and that'll drag silver down, and that'll drag gold miners down because reasons.

That's how real technical analysis is done, my bitches.

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