If it’s going to bounce, this would be the ideal level.
The stock market has barely begun to pull back, but the precious metals and other metals have led the recent downside. With respect to the gold miners, GDX is at a point where “if it’s going to bounce” (or even end the correction), this would be an appropriate point.
As to ending the correction, sure, it’s possible. GDX is re-testing a very clear support level and unlike last time, also finally testing the rising 200 day moving average.
But for now, if a bounce manifests from the SMA 200 (GDX @ 84.86 in pre-market), to be on the safe side, I’d mentally prepare for it to simply be a function of perhaps filling a couple upside gaps and test the underside of the 50 day moving average (blue).
This while maintaining a view that in gold, silver and the miners, enough corrective work has already been done for a real correction to already be in the books. Looking ahead, taking out the May 11 high of 98.74 would be a strong ‘end of correction’ indication. Until such time, we cannot know, speaking technically.
Of course, the Iran war is in the market instigating downside plunges and upside surges, depending on the nature of the news (and hype) of the day. So consider this an up to the minute snapshot as the Silver/Gold ratio (a guide for precious metals and other commodity/resources areas) rests on Option #3, which we discussed in updates and in NFTRH 915. Option #3 was a deeper pullback than desired, but the play is still alive.
For your reference, here is a picture of the Silver/Gold ratio nesting on Option #3’s parameter, the 50 day moving average. If GDX is going to bounce, obviously a hold and upturn by the ratio would be beneficial to many other commodity/resource related stocks, ETFs and sectors as well.
