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.

Newmont, NEM

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.

Zooming-in

Summary

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.

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.

The Danger Point®, trade mark: No. 6,505,279