GDX Weekly Chart
We noted the overbought status of daily GDX earlier. The weekly chart is also getting overbought. This leg has been vertical, after all. That is impulsive and it is the next phase of the launch we talked about a few weeks ago. But if we are going to a higher ‘C’ leg well above the ‘A’ leg from 2016 (as noted for HUI by a monthly chart in NFTRH 557) it would be best for this thing to take a fuel stop.
The 23 to 24 area is support and 28 (+/-) is a valid upside pattern measurement. So we can get hysterical perhaps to 28, and then take hard pullback and that would be fine on the bigger picture. It would be impulsive and on a launch that is what you want to see. But for the rally’s longevity and health a pullback to clean out the momos should take place at some point soon. The higher the level from which it comes, the harsher the eventual pullback is likely to be (Captain Obvious).
It’s a great problem to have, but it bears attention for all but the most steadfast holders. Gold took another boost in relation to the S&P 500 today and as noted by the second chart in this post, that is a prime macro driver. So there is reason for steadfast holding/accumulating pullbacks by non-traders. So we all need to know who we are… Trader? Investor? Casino patron? A mix?