Pre-market activity shows IBB near 147.00, just 3-points away from the 150, target and right at the high set on July 20th, this year.
If IBB reaches that target (this week), it would automatically set-up a bearish divergence on the weekly chart.
That divergence would be on both the MACD lines and the histogram … a rare occurrence.
It’s not an automatic short entry (via BIS). It’s a low risk area that’s important to watch.
In other markets, gold (GLD) has rebounded, up about 2% in the pre-market. However, price action remains in a congestion area of both resistance and support between 165 – 170.
The miners GDX are up as well and also hitting the underside of resistance.
In addition for GDX, the 35.80 – 35.90 area is a 23.6% Fibonacci retrace for the entire down move that started on August 5th this year.
From a trading perspective, we’re short the sector (not a recommendation, not advice) and have a stop in DUST that is likely to be hit at the open.
If this action in GLD and GDX is just short-covering, we’ll know fairly soon. Under such conditions, price action begins to erode quickly as the shorts cover and the bulls are too weak to keep prices higher.
The short (DUST) position may be re-established (not advice, not a recommendation) during this session or following ones.
The bearish assessment of the mining index (and gold) has not changed. Gold and the miners may be leading the way down as reported here.
The market will do everything in its power to make sure it throws off and frustrates as many bulls/bears as possible.
Charts by StockCharts