• 8 hours $5 Million Gold Toilet Vanishes
  • 8 hours Gold On The Rise After Fed Rate Cut
  • 11 hours Oil Trader Loses $320 Million On Derivative Bets
  • 1 day S&P 500 Officially In An Earnings Recession
  • 1 day Miners Are Weathering The Trade War Storm
  • 2 days UK Credit Card Interest Rates Are Skyrocketing
  • 2 days From Frenzy To Flop, The Death Of This Year’s Most Hyped IPO
  • 3 days Are Smart TVs Spying On Us?
  • 3 days Is Fossil Fuel Divestment A Waste Of Time?
  • 3 days A Russian Billionaire’s Space Quest To Save Humanity
  • 3 days Markets Take Breather As Consolidation Continues
  • 4 days Economic Woes Weigh On Copper Prices
  • 4 days World's Largest IPO At Risk Following Drone Strikes
  • 4 days Gold Is Beating Buffett’s Berkshire Hathaway
  • 4 days What’s Behind The Silver Sell-Off?
  • 5 days The Retail Apocalypse Is Accelerating
  • 5 days The Top Tech Stocks Of The Year
  • 5 days America’s Workforce Elderly Workforce To Double By 2028
  • 6 days Toyota Tests Solar-Powered Prius
  • 6 days Why The Gold Rally Flatlined
The Problem With Modern Monetary Theory

The Problem With Modern Monetary Theory

Modern monetary theory has been…

Zombie Foreclosures On The Rise In The U.S.

Zombie Foreclosures On The Rise In The U.S.

During the quarter there were…

Billionaires Are Pushing Art To New Limits

Billionaires Are Pushing Art To New Limits

Welcome to Art Basel: The…

Rambus Chartology

Rambus Chartology

Rambus Chartology

Rambus Chartology is Primarily a Goldbug TA Site where you can watch Rambus follow the markets on a daily basis and learn a great deal…

Contact Author

  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