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Market Summary: DUST, GDX, NEM

As indicated in yesterday's update, the action in the Market Vectors Gold Miners ETF (NYSEARCA:GDX) may have been a reversal.

As shown in the chart below, the GDX penetrated the down-channel line and the result was to exit (with profit) the Direxion Daily Gold Miners Bear 3X Shares (NYSEARCA:DUST) position.

GDX Daily

Chart by TeleChart

Update Note (8:02p.m. CST)

  • The volume on today's GDX move up is light. Even though it penetrated the channel line and prompted the exit, the move at this point is not strong.
  • If GDX has a gap-lower open at the next session and then makes a new daily low, the whole completion will change.
  • There are a lot of cross-currents and high emotions. Standing above the fray is the objective.

Another look at the GDX shows a potential trading range developing.

When markets are not trending, they are typically in some kind of trading range. There is obvious overhead resistance in the 25.50 area.

How GDX behaves as it reaches this area (if it reaches this area) may indicate a potential trade set-up.

GDX Daily

Chart by TeleChart

Looking at Newmont Mining (NYSE:NEM) it appeared as if NEM would sell-off as anticipated into a short-covering downdraft. However, it started to show the buoyancy mentioned in yesterday's post.

There has been no breakout to the up-side and the move is "news" driven which may or may not be sustainable.

NEM Daily

Chart by TeleChart

As a caution, there is a lot of volume being expended and the price bars are wide indicating instability (up or down) on NEM.

Update note (8:05p.m. CST):

  • Any erosion such as a low below today's low will bring the short-covering downdraft back into play.......NEM like several other miners (ABX, AEM, AUY) is unstable at this point.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.