The precious metals market declined today pretty much in tune with what I wrote in yesterday’s Gold Trading Alert.
Quoting my yesterday’s comments:
GLD is up and it encountered double resistance – the previous intraday highs and the rising resistance line. This could spark a turnaround, just as the miners have been suggesting through their weakness.
Looking at today’s performance of GDXJ, we see that it moved to the very short-term, rising resistance line and moved back down. The move above the most recent high is being invalidated.
In other words, I don’t see this price action as a game-changer. The outlook for mining stocks remains very bearish.
Silver plunged, so did miners, and gold price declined as well. At the same time, the USD Index (the UUP ETF at the bottom of the chart serves as a proxy) moved higher.
As gold invalidated its tiny breakout, it’s a sell signal – one that’s likely to be followed by even lower prices.
The GDXJ invalidated the tiny breakout above the previous intraday high and the rising resistance line. That’s also a sell sign that further strengthens the bearish implications of miners’ recent underperformance of gold.
The FCX is down today as well and it’s testing its previous lows.
This company appears ready to break below the neck level of the multi-month head-and-shoulders top pattern, likely leading to further declines. That’s great news as I’ve been writing about a short position in the FCX for quite some time – it will be great to see this position bring big gains.
Finally, the new trading position that we opened yesterday, became profitable almost immediately. This further confirmed its huge potential.
[The analysis continues in today’s Gold Trading Alert.]
As always, I’ll keep my eyes open, and I’ll report any updates to my subscribers accordingly.
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Thank you.
Przemyslaw K. Radomski, CFA
Founder, Editor-in-chief