• 385 days Could Crypto Overtake Traditional Investment?
  • 390 days Americans Still Quitting Jobs At Record Pace
  • 392 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 395 days Is The Dollar Too Strong?
  • 395 days Big Tech Disappoints Investors on Earnings Calls
  • 396 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 398 days China Is Quietly Trying To Distance Itself From Russia
  • 398 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 402 days Crypto Investors Won Big In 2021
  • 402 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 403 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 405 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 406 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 409 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 410 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 410 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 412 days Are NFTs About To Take Over Gaming?
  • 413 days Europe’s Economy Is On The Brink As Putin’s War Escalates
  • 416 days What’s Causing Inflation In The United States?
  • 417 days Intel Joins Russian Exodus as Chip Shortage Digs In
The Problem With Modern Monetary Theory

The Problem With Modern Monetary Theory

Modern monetary theory has been…

Another Retail Giant Bites The Dust

Another Retail Giant Bites The Dust

Forever 21 filed for Chapter…

  1. Home
  2. Markets
  3. Other

Diamonds in the Precious Metals Miners...

Back in September we looked at a possible morphing Diamond on the GDXJ in which the dashed trendlines were showing the original Diamond. When it started to morph into the bigger Diamond I added the two red circles that showed the false breakouts from the original dashed Diamond. As you can see the last two weeks produced a rally that so far has failed below the apex of the morphing Diamond. From a Chartology perspective the Diamond is a reversal pattern as it has five reversal points.

VanEck Vectors Junior Gold Miners ETF Daily Chart
Larger Image

Below is a longer term daily line chart for the GDXJ which shows how it is situated at the top of the big impulse move up out of the January low. The brown shaded support and resistance zone comes in between 29.75 and 32.50. It may be possible that the Diamond could be the reversal pattern at the first reversal point in a much bigger consolidation pattern.

VanEck Vectors Junior Gold Miners ETF Daily Chart 2
Larger Image

In the very big picture the neckline symmetry line comes in around the 33.75 area on the long term monthly chart, which would be in the ball park of the brown shaded support and resistance zone. Symmetry suggests the right shoulder still needs a lot more work compared to the left shoulder.

VanEck Vectors Junior Gold Miners ETF Monthly Chart
Larger Image

Below is a daily chart for the GOEX, which is the old GLDX gold explores etf, which shows a Diamond reversal pattern in place with a small expanding rising wedge forming as a possible halfway pattern. The price objective for the expanding rising wedge comes in around the 29.56 area. The 50% retrace of the first impulse leg is at 30.15.

As you can see the indicators below the chart all have a positive cross. If the expanding falling wedge plays out to the downside it would be nice to see a positive divergence on the RSI at the top of the chart.

The breakout below the bottom rail of the Diamond consolidation pattern only took about four days or so to reach the low. If we see a similar move down to the price objective, that will shake many PM investors to the core. This looks like a good time to raise a little cash if one is a shorter term trader. For the intermediate to longer term investors sitting tight still looks like the best approach. Once we get the first reversal point in place, at the bottom of the new trading range, that will suggest the low for the rest of the bull market is in place. Surviving this first reaction low will test your mental fortitude if it plays out.

Global X Gold Explorers Daily Chart
Larger Image

 

Back to homepage

Leave a comment

Leave a comment