Well they sure don’t make it easy to get a hard read on things in the very short-term, but one thing we should remember is that this correction is the last correction I expect before a consistent drive upward begins, assuming that either a hard rally or bull market are in the near future.  That is due to the symmetry of the weekly bottoming pattern, which will be reviewed in this weekend’s report.

Also, regarding fundamentals, no sooner had this morning’s update mentioned gold needs to rise vs. SPX and that is what we have got today.  A good start.  Gold is rising vs. oil and broad commodities as well.  It is flat vs. silver.

GDXJ is trying to climb back above the neckline.  A rise above 43 probably puts it on its way toward painting this as a head fake breakdown.  That is why confident precious metals bulls buying the dips should just tune out the micro management updates and well, buy on the dips.  A failure here dials in the next support levels per this morning’s update.


GDX found support and bounced at the neckline as pretty much expected.  A rise above 27 puts it on its way.  Below 27 keeps the lower levels on radar.


SIL has at least temporarily negated its breakdown.  Same general story as GDX.


Bottom Line

These ETF’s should go down some more but we are not in the realm of should, we are in the realm of is.  They will continue down toward corrective targets or they will negate the breakdowns soon per the parameters noted above.

Either way, especially with what look like stresses building in the broad markets, we keep open the idea that fundamentals could improve and confirm that this is or has been an opportunity to add positions.  I did just that this morning against JDST and the SIL short, which will be jettisoned if the miners break upward.

Whether it is sooner or a little later, the next leg upward could be a persistent one in which trading would be deemphasized in favor of trend holding.