The chart takes a relatively sunny view, showing a pullback to the green line, followed by a bounce to who-knows-how-high. The bearish argument is rooted in the failure of last week’s high to surpass April 17’s ‘external peak at 136.55. The shortfall was only 31 cents, but it left the weekly chart without compelling evidence that bulls really mean business. While it is true that a pullback to the green line would generate the kind of ‘mechanical’ buy that could be considered free money, we might expect only a one-level bounce back to 124.90 rather than a stampede to 159.87. We’ll consider the outlook one step at a time, first by monitoring the retracement that follows Friday’s nasty reversal.
GDXJ – Junior Gold Miner ETF (Last:128.80)