The gold miners as represented by GDX are on the verge of achieving a 70% gain since the all-time low at $12.40 which was printed barely more than 6 weeks ago:
There are a few notable observations to be made about this breathtaking rally in the goldies:
- Every pullback has been quickly snapped up (bullish)
- Price has continued to ride the stretched Bollinger Band higher (bullish)
- Volume has been enormous, indicating significant institutional participation (bullish)
- Price has now moved into an area of significant price memory which should make further gains much slower to come by as old supply comes back onto the market (slightly bearish)
- We began to finally see some institutional options activity in some of the senior gold miners yesterday and it was on the put side (bearish)
As I wrote a few weeks ago, we’re in uncharted waters here but there can be no doubt that this breathtaking rally in the goldies has very bullish implications longer term.