Purely from a technical perspective the most salient of the daily chart of the Market Vectors Gold Miners ETF (GDX) is the fact that for the past month all of the action has been confined between the declining 50-day moving average (50.26) on one hand the rising 200-day moving average (45.89) on the other. Let's notice that a similar "between the averages price contraction" occurred between mid-Nov and mid-Dec, but the upmove off the 200-day moving rocketed the GDX right through the 50-day moving average. The recent action between the averages shows that the GDX did climb sharply off of the rising 200-day moving, but failed to hurdle the 50-day moving average, which has since become a ceiling on subsequent rally efforts. My pattern and momentum work argue for another loop to the downside into the 46.50-45.80 area at a minimum prior to the next attempt to hurdle the 50-day moving average.



Mike Paulenoff is a 26-year veteran of the financial markets and author of MPTrader.com, a real-time diary of his technical chart analysis and trading alerts on all major markets. For more of Mike Paulenoff, sign up for a free 15-Day trial to his MPTrader Diary by clicking here.