The vicious pullback in the Market Vectors Gold Miners ETF (GDX) since last Thursday likely is nearing completion from both a pattern and near-term momentum perspective. Let’s notice that yesterday’s low at 32.62 neared a test of the November-April up trendline, which contained the weakness so far. Today’s upmove leaves a small upside “Island Reversal” in the GDX, which usually denotes a change in near-term trend direction. From an intermediate-term perspective, recent weakness did not inflict any damage to the large base pattern, and keeps the right shoulder intact as well. That said, however, to unleash the potential of the base formation, the GDX must hurdle and sustain above 38.95. While that is a long way off, dragging around the long position between 38.00 and 32.00 will be well worth the wait



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.