Best Financial Markets Analysis Article I have been watching the Market Vectors Gold Miners ETF (AMEX: GDX) closely since its October low at 15.74 and I am very impressed with its pattern and relative strength vis-a-vis the overall market and the gold price action itself.

On Nov 3, when the GDX was at 21.48, I noted to our subscribers that I was expecting a pop to the upside out of the 3-day sideways congestion area into new recovery high ground, which projects into the 23.50-24.50 target zone, after which I would be looking for a significant pullback (under 19.00) to set up a much more potent buying opportunity.

A view of the chart today shows that that green lines I drew nearly weeks ago appear to have closely demarcated the forthcoming new recovery high followed by the deep "give-back" beneath 19.00 -- actually to 17.79. Let's notice that yesterday's low was 12% above the October low, whereas yesterday the SPY broke the October low by 2%, which represents a significant outperformance by the mining group.

In addition, provided the potent upmove from yesterday has legs -- and can claw its way above the Nov 5 high at 24.72 -- the GDX has the makings of a meaningful double bottom pattern that projects to well above 30.00 in the subsequent weeks. As long as the GDX does not break below 20.00, my work will remain constructive.

By Mike Paulenoff

Mike Paulenoff is author of the MPTrader.com (www.mptrader.com) , a real-time diary of Mike Paulenoff's trading ideas and technical chart analysis of Exchange Traded Funds (ETFs) that track equity indices, metals, energy commodities, currencies, Treasuries, and other markets. It is for traders with a 3-30 day time horizon, who use the service for guidance on both specific trades as well as general market direction

© 2002-2008 MPTrader.com, an AdviceTrade publication. All rights reserved. Any publication, distribution, retransmission or reproduction of information or data contained on this Web site without written consent from MPTrader is prohibited. See our disclaimer.

Mike Paulenoff Archive

Only logged in users are allowed to post comments. Register/ Log in

The Market Oracle is a FREE Financial Markets Forecasting & Analysis web-site.
(c) 2005-2024 MarketOracle.co.uk (Market Oracle Ltd) - Market Oracle Ltd asserts copyright on all articles authored by our editorial team and all comments posted. Any and all information provided within the web-site, is for general information purposes only and Market Oracle Ltd do not warrant the accuracy, timeliness or suitability of any information provided on this site. nor is or shall be deemed to constitute, financial or any other advice or recommendation by us. and are also not meant to be investment advice or solicitation or recommendation to establish market positions. We do not give investment advice and our comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to enter into a market position either stock, option, futures contract, bonds, commodity or any other financial instrument at any time. We recommend that independent professional advice is obtained before you make any investment or trading decisions. By using this site you agree to this sites Terms of Use. From time to time we promote or endorse certain products / services that we believe are worthy of your time and attention. In return for that endorsement and only in the cases where you purchase directly though us may we be compensated by the producers of those products.