Like GLD, in this report, GDX looks like it’s correcting in a-b-c, type fashion.

The GDX chart shows the Fibonacci projection with target indicated (blue line and arrow).

If the dollar (UUP, proxy) reverses and heads towards resistance 24.75 – 24.80, while gold counter-trends higher, we’ll have a tenuous situation.

Something will break; gold or dollar and probably both. The dollar higher, gold along with the rest of the market, lower.

With so many short on dollar and bonds, if UUP gets to underside resistance, a reversal (to test back to 24.50 lows) could be very short lived.

Keep in mind, when it all comes apart at the seams, it’s likely to be quick.

In other markets, XOP in the pre-market shows a slightly higher open with DUG showing lower.

After the session is over and if there’s a new daily high in DUG, the stop will be moved up (not advice, not a recommendation).

Separately, and as public service, here’s a link to an old article written by Robert Prechter Jr., way back in 1986; what it takes to be successful in the markets.

It’s a good read … probably the most important part is the last bullet item, No. 5  “The Mental Fortitude To Accept Huge Gains”

Stay Tuned

Charts by StockCharts

Note:  Posts on this site are for education purposes only.  They provide one firm’s insight on the markets.  Not investment advice.  See additional disclaimer here.