So yes, that’s exactly what happened.

The GDXJ closed the weekly with a record (nominal) decline – that we haven’t seen since May 2022.

(Click on image to enlarge)

The above chart shows that the multi-top that the GDXJ is most likely forming is indeed (as I wrote about it before) similar to what we saw at the 2020 top.

(Click on image to enlarge)

Zooming in reveals that the multi-top can be viewed as a potential head-and-shoulders pattern with the downside target at about $33. The previous chart suggests that the next local bottom could form close to $34 (61.8% Fibonacci retracement plus the rising medium-term support line), so overall, we can say that the GDXJ is likely to form some bottom in the $33 - $34 area.

But let’s make it clear – the rally that would likely start from this area is likely to be just a correction within a bigger move lower. The below HUI Index chart (a proxy for gold stocks) shows the big picture.

(Click on image to enlarge)

The HUI Index is after a huge zig-zag correction that started in late 2022 and ended very recently. The rising dashed lines are parallel – the rally that started in 2022 was similar to the one that started (and likely ended) this year.

And all this is likely to have been a zig-zag correction of the decline that started in 2020.

Taking an even broader perspective, we see that the entire 2019 – now performance is similar to what we saw in 2007-2008, and then between 2009 and 2012 – I marked those areas with green rectangles.

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