Here is a daily chart of the GDX.
Last week’s huge volume has thus far not been followed up with anything dynamic to the upside. In fact, the activity looks like the lame recoveries after previous plunges. These have taken the form of bear flags that served to reset status from over sold to fuel new declines.
What is happening now could be another one of these situations, albeit coming after the most intense capitulation activity yet. Recall last week’s chart highlighted what had been a series of “rolling capitulations” until the big one last week.
One of these days I may be wrong with the cautious attitude and this could be that time, given the power of last week’s downside. But I must report what the chart says and what it says is that we have not yet had a hard reversal or any kind of volume that implies buying conviction. In other words, we have similar characteristics as those in place during the series of bear flags leading up to last week.
Watch for volume and watch for the structure of the rise to break its channel and get impulsive to the upside. Otherwise, the chances increase that it is a bear flag.
Since I am in trading mode, I have taken another excellent profit on TGD and am evaluating whether to sell other items. But I have committed to trading until I better understand the landscape. We all have our goals and orientations. My goal remains to preserve capital until I get a sense that longer term speculation is the way to go.