Gold Up … Miners Down

It’s Not A ‘Miners’ Bull Market

Gold (GLD) is hovering near all-time highs but the miners, especially the Juniors GDXJ, are far below.

What better way to show the disconnect than looking at the weekly close charts for both gold (GLD), and GDXJ.

GLD & GDXJ, Combined, Weekly Close

The next chart has been discussed in prior updates but is repeated here for refrence.

The difference is GDXJ’s, now in up-thrust (potential reversal) position.

Junior Miners GDXJ, Weekly Close

Closer in on the weekly candle chart, we have the following repeating pattern, ‘Spring to Up-Thrust‘:

We’re at the danger point where it won’t take much to see if action is to continue higher or reverse.

The case for reversal is shown on the daily below.

Note the energy of the upward thrusts Force Index, is dissipating (black arrow) while the energy on the downward thrusts is increasing.

GDXJ, Daily with Force Index

Summary:

The Junior Miners are not in a bull market and have not been for years.

They never fully recovered after gold’s decline during the 2012 – 2015, timeframe. In the meantime, they may have posted an ‘a-b-c’ corrective (bearish) price action.

Obviously, there have been upward spasms as has just occurred over the past six-weeks.

Now, it appears we’re at the juncture where action has set probabilities to favor a downside reversal (not advice, not a recommendation).

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

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