The PM complex has rallied strongly for three days in a row, which is either going to be the beginning of an important move or the end of an important move. Today the GDX backtested its neckline, which extends all the way back to September of last year. If the backtest holds resistance at 86.90, then this is the end of the countertrend rally, and a move lower to the H&S measured move price objective comes into play around the 55.30 area.
This long-term weekly chart begins at the 2020 crash low, which shows the multi-year H&S consolidation pattern. After the breakout and backtest to the neckline, the price action almost tripled into the all-time high made in late February of this year. Since the all-time high, the GDX could be forming another consolidation pattern in the string of consolidation patterns since the breakout from the H&S consolidation pattern. There is still more work to do, like trading back above its 30-week EMA and then taking out the top trend line of the falling wedge. If this pattern plays out, then this is the beginning of the next impulse leg higher.
Most already know if they’re in the bull or bear camp, but I’m going to reserve judgment for a while longer and see what develops over the coming days.
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