E Miners Exploded Higher From The 3-Week Consolidation

Miners exploded higher from the 3-week consolidation invalidating the bearish descending triangle. The huge volume gap higher resembles a recognition up day. How prices respond between now and Friday will either confirm or deny a breakout. I summarize two scenarios at the end of today’s report.

I expected gold to throw us a curveball. I’m not sure if we’re seen it now amidst an extended cycle or if the curveball was an unorthodox 6-Month low in early May. If it’s the former, metals and miners, need to top this week. My call for lower prices is on life support.

I will continue to update throughout the week. Needless to say, I’m sitting on the sidelines until a clear risk-reward scenario presents itself.

-US DOLLAR- Still no sign of a bottom for the dollar. When it finally catches a bid, we could see a sharp reaction.

-GOLD- Prices made a new closing high. Either this is an intermediate cycle extension or gold put in an incredibly shallow 6-Month low that never produced a failed daily cycle. Prices should top by Friday if this is a stretched 6-Month series.

-SILVER- Prices closed above the 200-day MA, but they remain below the April high. If the gold cycle is extending, silver prices should top with gold by Friday.

-GDX- Prices exploded higher invalidating the descending wedge pattern and nullifying the May divergence. However, the longer term divergence from February remains. The upper trendline must hold, to maintain our outlook for lower prices. If prices gap through the upper trendline with ease, I’ll concede a breakout in miners and look to buy long positions. Note: There was selling into strength today.

-GDXJ- Juniors charged higher on large volume. Prices are at the trendline and could breakthrough tomorrow. I might buy a breakout if the structure looks right. I’ll update members if I take a position.

-HUI:GOLD RATIO- The HUI:GOLD ratio would have to breakout above the upper trendline and defeat the 200-day MA to end the 9-Month consolidation. I that occurs, I’ll look to buy gold, silver, and miners.

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Chee Hin Teh 3 years ago Member's comment