Gold continues to look like it wants to test support at around 1270. A rise above 1300 could put that prospect in the rear view mirror, however.
Silver has been grinding down to the mid 19’s. Low-mid 19’s is the limit on the support zone. I am painfully aware of this because SIVR is and has been my largest holding in the IRA, and the loss (on paper) has been significant. But a commitment is a commitment and I hold it until such time as parameters are broken.
Gold miners fooled around with support yesterday before holding into the close.
GDX has changed its daily trend (AROON) to down, which is no great shakes in this sector. Indeed, these corrections are meant to scare the hell out of people and clean them out. The weekly trend by the way, remains up.
The gap fill is a good thing because it sat there for so long beckoning an over bullish gold ‘community’ that paid little attention to it during Ukraine especially. The lower gap does not need to fill (in my opinion) because it is a ‘break away’ gap, which happened on volume and changed the intermediate trend to up as it launched GDX above the 50 day moving averages (at the time).
RSI is in an area where it can bottom. Whether yesterday was the low or one is yet to come, it appears that the vast majority of GDX’ decline is in the books prior to a bounce attempt at least, or resumption of its larger rally at best.
Yesterday’s reversal volume did not inspire me, but the majority of the day was in the red, so maybe we were looking at a situation where sellers were all sold out (note 4 previous high volume selling days out of the previous 7 sessions) and all that remained were a few plucky buyers. If today is a positive day we’d want to see it happen with volume. The same can be said of any coming bounce, if today is not the day.
A lack of volume would indicate ‘dead cat bounce’.
Short-term technical damage has been done, but it is always that way on gold stock corrections. Volume will be an important indicator in determining whether that damage can be undone in the short-term.