The Market Vectors Gold Miners ETF (GDX) emerged from a 5-month accumulation pattern today, as it gapped-up above 51.10/20, and has continued to an intraday high at 52.75 so far. Let's notice, however, that the 5-month accumulation pattern fits into a much larger potential accumulation pattern that spans back to March 2008. If the GDX climbs above 55.00/40, then the larger bullish pattern will trigger upside targets at 57.50, and 62.60 thereafter. Only a sudden downside reversal that breaks back below 51.00 will be an initial warning signal that all is not right with the miners, while a break below 48.00 will wreck the bullish pattern totally.

 

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