First published on Sun Sep 3 for members: While the metals refused to offer much in the way of a pullback last week, they sure did provide us some nice sideways consolidations. In fact, they held support almost to the penny, and then continued higher on Friday (Sep 1).
And, while everyone seems so skittish to be bullish, the metals are still setting up to leave the station with many disbelievers watching on the sidelines. But, as I noted in my trading room this past week (of (Aug 28-Sep1), “In metals, you may get scared, you may freak out, you may lose your mind . . . but as long as support holds, there is no reason to lose your position.”
Allow me to show you what I mean from the example of our trading support and resistance over the prior week using the GDX. Once the GDX broke out, I put out a chart showing the support we then had to hold to keep pressure to the upside (GDX1). Moreover, I even highlighted the next target should support hold. In GDX2, you will see that the market held the top part of the support box, and then continued to our higher target, and even slightly exceeded our target by a few cents. So, in GDX3, I raised our support region to point to where I thought the market will likely pull back after striking our target.
Well, for the next two days the market tested our support region, the initial test shown in GDX4, wherein I added our next target for the smaller degree move. And, as we can see in GDX5, the GDX rallied to our next target on Friday, before beginning another pullback, as expected, during the rest of the day on Friday. And, we basically had the same tracking we did on a micro basis with the GLD all week, as it held our noted support in the 124 region.
Thus far, metals have been holding upper support, and not providing the bigger pullback I had ideally wanted to see. So, it does look like the GDX may have left the station.