Gold Miners Under Pressure, Major Support Test Up Next
The bear flag interpretation of the recent move up in the gold miners has turned out to be correct with the falling 50-day moving average proving to be an excellent spot to sell earlier in the week:
The breakdown has been swift in the aftermath of the U.S. Presidential election result with the GDX dropping ~18% from Wednesday morning’s high. The measured move target for the bear flag breakdown has essentially already been reached (~$21), however, there is a good chance that major support near $20 needs to be tested and the open gap from April 6th filled in before a tradable rally will occur. We will be looking to ‘buy blood’ in the gold miners but given the ferocity of the breakdown there is probably some more blood to be spilled.
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