1. The gold market feels like the Indy 500 track on race day. All the cars of the precious metals sector are revving their engines on the start line.
2. The junior gold stock sector seems to be revving its engine the loudest of all. To get a visual picture of why I hear that sound, please click here now.
3. I’ve compared GDXJ to CDNX, and you can see that a head & shoulders bottom pattern has formed, suggesting that junior gold stocks are poised to significantly outperform the general junior resource sector.
4. Both the GDXJ daily chart and the 30 minute chart have very bullish patterns in play. Please click here now. Indicators like MACD are moving higher and selling has dried up.
5. When few sellers remain in an oversold market, strongly bullish news can send the price higher surprisingly quickly.
6. Please click here now. This 30 minute chart showcases an island bottom. GDXJ is currently “chewing” at resistance in the $19 area.
7. I expect GDXJ will burst through that resistance and charge higher, but it’s important to remember that charts show investors a picture of what is probable, not what is guaranteed.
8. The most probable scenario indicated is that GDXJ makes its way to the dotted black line I highlighted on the daily chart at $27.16, but Ben Bernanke could throw a monkey wrench into our victory dance.
9. Dr. Bernanke is scheduled to speak publicly today and tomorrow. There’s no question that the “recovery” has lost steam, and it would seem logical that anything he says should be supportive for gold.
....read points 10-24 HERE