The big picture of the Market Vectors Gold Miners ETF (GDX) argues strongly that the price structure has additional downside ahead that points to a test of the Jan-Aug support line, now at 35.65. The juxtaposition of price, the RSI, and MACD at this point looks to me like the GDX is vulnerable to considerly more downside than 35.60.

In fact, I am expecting a test of the July low at 34.05, the success or failure of which will determine if the GDX will head for 30.00 thereafter. The combination of a correction in general in equity prices, a stronger dollar, and relatively weak commodity prices form a potentially extremely negative confluence for the GDX.

Mike Paulenoff is a 26-year veteran of the financial markets and author of MPTrader.com.