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March 9, 2009

Gold and Silver Miners

A quick note on mining shares, as I forgot to expound on them in the weekend post. Based on the chart of GDX, mining shares appear to be undergoing an a-b-c correction which measures nicely to a trend line I once mentioned the shares should visit:

stock chart

Bouncing off the trend line would roughly give the "a" and "c" legs equality, so the outlook fits nicely. We should then see miners turn higher for another healthy 5-wave advance. Should the trend line fail to provide support, something more dire may unfold, but we'll deal with such issues if they occur.

For the record, I released my silver futures back into the wild earlier today. I did not like the action and also thought that the retreat in GDX could foreshadow an opportunity to repurchase them at a discount.


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