It was looking good all morning, until at least noon, then they fell out of bed… again! The metals closed down, and the miners, which had been up well, sold-off too. So, let’s just go straight to the charts, to see how much more technical damage may have been done.
Hmmm, perhaps it’s not as bad as I thought. First, I find that GLD reversed off the level it sank to only 3 days ago on average volume. I wonder if the miners did the same.
PAAS fell on big volume, but it’s well above it prior low. PVG did the same. Add SSRI to that roll, along with SGDJ. SLW had a similar outing. HL declined on light volume, and is well above its previous low, besides. CDE fell on light volume, too.
SLV declined on big volume, and closed at a lower low, but not beneath the low it has recently traded at.
RGLD fell on average volume and is holding up fairly well. The same for ABX and SILJ. FSM did the same, as did AG.
SGDM lost on light volume, but hasn’t taken out its recent low either. GDX is off, but volume was somewhat bigger.
The average volume for all expanded, but only by 12% over the 50-day average, which is not meaningful. I was concerned that perhaps the most recent lows had been taken out, but that was not the case. The recent loss has not been on as a great a volume boost as the very recent bounce… that would be a positive, as the bounce was relatively weak, but the settling back from the bounce is on even weaker volume. This would indicate that the more recent support level, which gave way last Friday the 11th, is trying to regain footing, and establish a new, lower level of support around this present price area; which is where it had broken out from in early April… had established as a support level in late April, and became a support level launching pad the end of May/early June. The lift-off from there took prices to the mid-August highs, from which we’ve been retreating since.
From a purely technical chart-reading sense, the miners have given back all their gains from that important late May/early June launch level, and a bullish case exists because of that, as if to say this has only been a correction. But this level is a true line in the sand, and really needs to hold. And whereas I have already been rendered a skeptic with last Friday’s break, any further deterioration in prices from here might as well signal the end. I have read a very experienced pro to say that the bottom is in, and that the lows seen Monday was it. I’d really like to believe he is correct. I need to update my timer to see if it concurs with that idea. Back when I do….
Here’s to your accumulation of real wealth!
Harold f Crowell