Metals and miners can’t seem to get enough traction for a bounce and may be setting up to break lower sooner than I expected. If prices drop next week, I’ll be watching for signs of a bottom and reversal. One more drop should complete the intermediate-term decline, and a new up cycle will likely begin.
The miners are potentially making small bear flags, best seen in the Silver Wheaton chart. Prices dropping below the lower trendlines will trigger a quick move lower.
-SLW- Silver Wheaton is the best example of a small bear flag that looks ready to break lower. A break lower could drop prices to around the $21.00-$20.50 level.
-GDX- Prices haven’t got enough bids to rally and may be setting up for another decline next week. If this occurs, it could be the final drop I was looking for. $21.50 seems like a logical objective in GDX.
-GDXJ- Prices breaking below the blue trendline should send them to our original target between $35.00-$34.00.
Simply something I’m watching for next week, prices have to break below the small trendlines to trigger a drop.
The Weekend Newsletter will be released tomorrow morning.