Jordan Roy-Byrne: In our last editorial we pointed out how the gold stocks had veered off the recovery course. They fell well below the recovery template and fell below their 50-day moving averages. Furthermore, the positive “non-taper” news turned out to be the mother of all bull traps for traders. The market soared on presumably an epic amount of short covering. Yet that only served to be a selling opportunity for traders. That sequence of events only strengthened our view that the sector continues to be headed for a retest which could serve as the mother of all buying opportunities.
The weekly chart of Market Vectors Junior Gold Miners ETF (NYSEARCA:GDXJ) and Market Vectors Gold Miners ETF (NYSEARCA:GDX) shows these markets sitting between strong support and strong resistance. At current prices, GDX has 12% downside to its daily closing low while GDXJ has 21% downside to its daily closing low. The silver stocks (SIL is not shown) also have 21% downside to their daily closing low. That is probably too much downside for a new low but it doesn’t rule out a retest.
The weekly charts for Gold and Silver show a similar picture. Gold rallied nearly $220 on a daily closing basis. However, it failed at $1400 which is now clear resistance. Similarly, Silver rallied from $18 to nearly $25. There is quite a bit of resistance at $24.(...)Click here to continue reading the original ETFDailyNews.com article: The Worst Is Just About Over For Gold Miner ETFsYou are viewing an abbreviated republication of ETF Daily News content. You can find full ETF Daily News articles on (www.etfdailynews.com)
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