Goldminers ready for another leg down?

Are the goldminers (GDX) ready for another leg down? The daily candlestick chart below is rather busy, so let us explain what we can objectively analyse step by step .

  1. From the low made in February to the high made in August we label that advance as 3-waves: red abc to black a.
  2. Since then, price has stair stepped down and recently bottomed and rallied. But, it stayed within the blue support zone and was today rejected at the (purple) 50d SMA, as well as the upper red descending trendline.
  3. At the recent low in October we had a nice Fibonacci-extension for green wave c, where c=1.618x a, measured from green b.
  4. The bounce since that low has so far been 3-waves: orange abc, and also here we find a nice Fib-relationship where (orange) c=a.
  5. Today’s high is most likely wave d of an abcde decline and wave e should now follow, likely targeting a double bottom at $22 ish (grey v=i), which is also where red c=a.
  6. After that low we expect prices to rice (black arrow) and reach well over $50. 

gdx

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