Wednesday, April 10, 2013

GDX, gold stocks and precious metals

Another horrid day for the precious metals market, Gold metal down -$25, however gold stocks got crushed again and gave back all their gains from yesterday!

Here's two charts of GDX, the gold miners ETF.

The first chart is one that we made last week that shows GDX in a major downtrend and is either in the process of forming a head of an inverse H&S pattern or a bull wedge that has more downside.  Needless today, this sector has a lot of work to do. A lot of gold bugs have been capitulating lately, so perhaps that is the beginning of a bottom process , but otherwise this sector has been a disaster.  

The second chart shows a a second daily chart of GDX using a simple system of a confirmed cross over of 50% for the Williams % indicator, it has caught this entire move down and has never once got caught going long in this downtrend from Sept last year.

Otherwise in the short term GDX has a another bear flag look to it, thus I wouldn't be surprised to see anther flush down again.  We probably need another good washout in this sector in order to get the remaning gold bugs to throw in the towel, which would market a bottom.

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