Sunday, October 09, 2016

Gold Miners (GDX) And Gold (GLD) Expected To Bounce But The Slide Will Continue

Gold Miners ETF GDX and Gold (GLD) have been taking it on the chin, but a healthy market should have the pain spread out over time rather than compressed into one short volatile period of time. Gold Miners appear to have put in a downward channel but some of the short term indicators are a little oversold. Don't for one second think this is an endorsement that the wind is back in GDX's sails, it's not, as over the longer term I expect the slide to continue. What I am proposing though is that because of the alignment of the higher lows put in September I think we have a really good site for overhead resistance in place. If you have shorts in GDX they should probably be sold and then re-bought if this proposed move pans out.
Gold ETF GLD is putting in a similar pattern however the downward channel is a lot harder to spot. Overhead resistance is being created from the higher highs in Summer and the higher lows in September. Next week is going to be a very interesting week for gold if this plays out!