“As has been the case often lately, the precious metals are positive in pre-US open. These have tended to be fleeting positive vibes, but we should keep the technical parameters in view nonetheless because a) you don’t want to buy (or at least hold) a sucker bounce and b) just maybe the forces of right and good will one day break out of this funk. So we should stay tuned up on what constitutes bull and bear in the precious metals.” – From the last eLetter dated 5.22.14 (pardon the duration between letters):
The precious metals complex eventually broke down, testing the support in gold, silver and notably the critical HUI parameter of 205 also noted in that update. This parameter is the one that keeps the potential for a weekly bottoming pattern in play.
Gold stocks rallied today. So is this something real?
Stockcharts.com is down today, but we used backup Barchart.com to post a couple charts of GDX at the website, illustrating a potential bear flag, low volume and resistance on the daily chart: Gold Stocks at Resistance.
As you can see, the daily chart is at important resistance. It is considered a bear flag until this zone is successfully cleared, preferably with some conviction (read: volume).
Why do we continue to work this sector? Well, it sure is not due to current fundamentals (a subject for another day… or every week in NFTRH). It is due to the ongoing potential that GDX/HUI have been forming Inverted Head & Shoulders bottoming patterns and that technicals would lead fundamentals.
So I wanted to call your attention to the fact that GDX has not proven anything yet, despite today’s bullish activity and indeed the entire bounce of the last week, which we have been anticipating. The daily chart is the key to the weekly because if the bounce continues and morphs into a rally that starts clearing resistance levels, then the weekly pattern takes over… and it is bullish.
First things first, however.
Some notable posts at the website since the last eLetter:
- Two Sentiment Pictures A view of low mutual fund cash and gold and silver discounts of 6.5% (June 10)
- Pivotal Events from Bob Hoye (June 9)
- Bears Say “Rut Roh” The Russell 2000 (RUT) breaks out (June 5)
- Government’s Disastrous Reign Over US Money EWI on the grizzly details, includes a free report from Prechter. (June 3)
‘
Thank you again for reading. If you’d like an affordable weekly guide (with interim TA and Trading updates as needed) that is always on the job for its clients’ best interests, I’d be more than happy to welcome you to the Notes From the Rabbit Hole Premium subscriber base. –Gary Tanashian
“Many thanks for a really consistently great service.” –John C 6.5.14
Biiwii.com
Subscribe to NFTRH (premium)
Subscriber Testimonials
Twitter @BiiwiiNFTRH
About & ToS
Biiwii.com does not recommend that any trading or investment positions be taken based on views expressed in this eLetter. If you speculate or invest it is suggested that you consult a financial adviser qualified in your area of interest. See full Terms of Service (ToS) above.
