Where are gold stocks heading in the near term? In my opinion its DOWN
GDX has been under distribution since early May. We are approaching the end of the distribution process and the big players are just about finished unloading there shares on to the public. I believe this 3 day rally in GDX is going to be the last one before prices are finally marked down. Today we have the break over the ICE (BOI), a last gasp of demand. Volume is very low on this rally and the weis wave indicator at the bottom of the chart is showing decreasing cumulative buying, a sign of weakness. Im expecting this rally to rollover soon and give back all gains as prices are on the verge of being marked down. Gold is at resistance as highlighted by the down trendline in my previous gold post, and it should head back down soon.
We are approaching phase E of the distribution process. Today we had the BOI and in short order we should see a big drop in GDX. Now is not a good time to be an investor in gold stocks. I am a gold bull at heart but I believe that we will get a much better opportunity to buy gold, silver and the mining shares sometime later in the summer. What kind of prices can we expect?
The price count so far is showing an objective of 19.6 on GDX and possibly as low as 18.4. Keep in mind that the longer this distribution range plays out then the lower the price could go. So have patience and let this process play out a little longer before jumping in. GL traders.
Upvotes appreciated. I would like to share views with other traders here so feel free to ask questions.
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