Just a checkup since the last update on GDX. From that update…
I was not willing to gamble that the correction would go deeper, hence the adds yesterday. If GDX fills the gap and breaks the channel (bull flag) to the upside it would appear to be “bull on” (Which would be confirmed by a higher high to the May 6th high of 50.83)…
The flag/channel has been broken to the upside. It does appear to be “bull on”. It is also testing the confirmation level of 50.83. Test or no test, daily GDX has now handed the ball off to the bulls. Also, check out RSI, which did nice work coming down off its overbought reading.
Silver has held the pop above the daily SMA 50 for 3 days now. Given its state above both moving averages which are each trending up, the bulls have the ball here too. I increased my PSLV position for that reason.
Gold is also in a bull flag like GDX, but has not broken out of it.
As implied by the above, the HUI/Gold (GLD) ratio has held intact thus far, signalling no sector breakdown and keeping the door open to the correction ending sooner rather than later and from routine levels.
The Silver/Gold ratio remains a stick in the mud. Of course, unlike many, we did not need silver to be strong to be bullish on gold stocks and the precious metals complex. However, my gut thinks that a final upside show could be put on with silver leading. Thus far, that is a non-starter.
