I mentioned in another post that I thought gold stocks were forming a bearish head and shoulders pattern. This pattern is becoming more mature, and, in my view, has been activated. The downside target is what is labeled "Target 1" in the above chart.
Target 2 refers to the unfilled gap left from the beginning of September. I think that GDX would not descend past this area of support.
The next chart shows a weekly chart of GDX:
The main point of focus should be on the large red candle that occurred on heavy volume last week. There is absolutely nothing bullish about that candle. This is another reason that gold stocks look bad right now.
![[Most Recent Quotes from www.kitco.com]](http://www.kitconet.com/images/live/s_gold.gif)
![[Most Recent Quotes from www.kitco.com]](http://www.kitconet.com/images/live/s_silv.gif)
2 comments:
Doesn’t the $54 high on GDX, indicate that gold stocks are still in inflation mode / interest rate cuts.......
the 200 day = 41.9 or so...
and i think as long as GDX stays above the 200 day...GDX should stay in a trading channel, of say 42 to 50....
Doesn`t inflation mean interest rate increases, not cuts... But more importantly, this site is about charts, not fundamentals.
In terms of the 200dma, I doubt that would hold back the bears. It never has acted as support for the past year.
Thanks for the comments.
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