Gold closed the day at $1,240 and Silver at $16.48. Miners rallied most of the day but sold off after the FED announcement. Nonetheless, miners were relatively stable in the face of significantly lower metal prices. Perhaps subtle signs of bottoming.
GDX rallied to the 10-day EMA by 2:00 PM before selling off. Prices formed a bearish inverted hammer and closed at the exact low for the day. Typically, this behavior is decisively bearish concerning the next trading day. However, miners have known to form bottoms during days like this. Take the March 9th low for example; I call this a flat bottom reversal.
I see two possible scenarios resulting from today’s action.
1) Miners either bottomed today, or they will bottom sometime tomorrow morning. A daily close above $21.75 in GDX will support this theory.
2) Today’s bearish action is validated, and severe selling produces a mini-panic. That takes the form of a gap lower in the morning, followed by tenacious selling throughout the day. I would expect to see GDX down over 5% in this scenario.
I’m not sure which scenario will play out…if any. I will attend the markets overnight and update members in the morning.