Newmont Pushes To Extreme
When a profitable position begins to erode, the questions begin.
Is it just a correction or a full-blown reversal; how do you know?
Of course, nothing is ever known for absolute sure.
However, in the case of the current trade DUST-21-01, which is a short position on GDX (not advice not a recommendation), the market’s exhibiting what looks like terminal (reversal) behavior.
Of all the thirty-one equities in the Senior Miners GDX, only one is above its mid-November highs: Newmont Mining.
With Newmont getting all the attention, the view is the entire market is ‘thinning-out’.
In addition, price action in Newmont tends to suggest it’s exhibiting terminal behavior.
Daily chart below.
It looks like NEM has just ‘thrown-over’ its wedge pattern. Typically, the last gasp before reversal.
With markets reaching new all-time highs yet again, the gold miners are showing they’re not invited to the party.
From a Wyckoff standpoint and for bear markets, the focus is on the laggards … not the ones at the top (not advice, not a recommendation).
Unless the dynamic of GDX changes, and others in the index push past their mid-November highs, this market continues to look ready for reversal.
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.
The Danger Point®, trade mark: No. 6,505,279