Figure 1 is a weekly chart of the Market Vectors Gold Miners ETF (symbol: GDX). The pink and black dots represent key pivot points or areas of support (buying) and resistance (selling). There are two bearish signs that point to GDX forming a market top.

Figure 1. GDX/ weekly

Bearish sign #1 is the double top.

Bearish sign #2 is the fact that prices are trading below the most recent key pivot point or support level at 49.49 (see black up arrows). This level is now resistance. A weekly close above this level would negate this analysis. Of note, back in 2008 there were several reversals around key pivot points before a close below support leading to a waterfall decline.

When we put these two signs together, it appears that GDX is making a market top. A break below the rising trend line on the graph would be added confirmation. If this were to develop, GDX should trade to the next support level at 41.83.