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• We should know within the next few trading days if gold intends to breakout above $2080 and rally to new all-time highs. 
• I’ll be watching gold miners closely for clues. Below are my current thoughts on GDX.

-GDX- The top panel shows MFI is near-term overbought (blue arrows). A similar reading in January triggered a 1-month correction.

However, it is important to note that in robust bull markets, indicators like MFI can stay overbought for very long periods.

BULLISH: I think the rally has more upside potential as long as GDX does not close below the January $33.34 high.

NEUTRAL: Closing below $33.34 could trigger a 3 to 5-day pullback to relieve overbought conditions and let the 50-day EMA catch up.

BEARISH: A reversal lower and progressive closes below the 50-day EMA would support a more profound (possibly multi-month) correction.

(Click on image to enlarge)

Final Thoughts

This move looks pretty strong. We could be on the verge of a meaningful breakout. The next few days are important.

I would view a strong 5% up day in gold miners today or tomorrow as very bullish.

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