E Metals And Miners Are Beginning To Correct

President Trump announced he would delay tariffs on some Chinese goods until December 15, 2019. The news sent stocks sharply higher and precious metals lower.

Gold and silver formed significant outside reversal days, and a top is possible. Gold would have to recapture $1525 relatively quickly to restore yesterday’s short-term breakout.

Overall, it looks like metals and miners are beginning to correct. The correction process could take several weeks to a few months, depending on the underlying structure.

A correction from this level should deliver notable buying opportunities. One stock (CDE) could be setting up an ideal head and shoulder bottom.

-GOLD- Prices formed a significant outside reversal day supporting a potential top. Gold needs to close below today’s low ($1488.90) to make an official swing high. If a top is verified, I’ll look for a multi-week correction back to $1400 with the potential to retest the $1360 – $1380 breakout area.

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-SILVER- Prices swung nearly a dollar between today’s high/low forming an outside reversal. A daily close below $16.60 would reinforce a top. Initial support arrives at $15.50.

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-GDX- Miners finished below last Wednesday’s gap, and prices may have topped at $30.00 – closing below $28.00 would confirm. A correction from this level would support a decline to support between $23.50 – $24.00.

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-GDXJ- Juniors need to close below $39.94 to establish an interim top at $43.10. If confirmed, a decline back to support around $32.50 is possible.

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-CDE- A pullback to fill the June gap near $3.75 could setup a near-perfect head and shoulder bottom. If verified, a breakout above the neckline ($5.75) would recommend an initial target of $8.00 with the potential to reach $12.00+ in 2020.

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-SPY- Stocks rallied after President Trump said he would suspend additional tariffs on Chinese goods until December 15, 2019. Upside follow-through above 296 would support a bottom.

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Disclosure: None.

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