First published Sun Jan 1 for members of ElliottWaveTrader.net: Last weekend (Christmas weekend), I noted that set ups such as we have been seeing in the GDX usually lead to strong rallies which can see a 10% move higher quite quickly. Since then, the GDX ran 19% from its recent lows, with Thursday (Dec 29) alone seeing a 7.5% rise. Yes, these divergent set ups can provide for powerful reversal reactions. But, it does not mean we are out of the woods just yet.
In fact, silver still is quite weak, and gold has not yet convinced me either. Moreover, one does not have to make this very complicated at this point in time when one views the daily chart on the GDX. As many of you, as well as the rest of the market, have been seeing the downtrend channel we have developed in the GDX, we cannot gain escape velocity until we are able to clear that 22.50 region.