NOTE: I will be on the road for the next couple of days, so please don’t interpret any lack of activity on my part as having anything to do with markets. I am trying to button down my positioning this morning before I leave.
Using GDX here instead of HUI because it shows volume.
The picture is clear. GDX is breaking down from a bear flag after bumping up against the SMA 50, which was one of our logical resistance areas (ref. HUI analysis). Anything can happen because charts do not control markets, but the declining volume implies it was a bear flag and the breakdown out of the flag implies failure. GDX/HUI are vulnerable if they remain below their 50 day averages.
The bottom line is that if this plays out as it would, we’d expect new lows with the next HUI target being the 62% Fib at 230.