Okay, folks. We've had six straight narrow-range days. Something has got to give here. I think I read somewhere, maybe on Wall Street Warrior a long time ago, that seven straight days is the record. In fact, it occurs to me that Jamie was referring to narrow-range bars... intraday bars, not daily bars... so seven straight narrow-range days is extreme. A big move is coming, and price action suggests the break will be lower.
If price action told the whole story, I would be drooling heavily over the prospects of a big down day tomorrow. Instead, there is just a slow trickle down my left cheek. The reason is volume is not backing up the story here. Our early-week decline unfolded on exceedingly light activity. Perhaps volume will swoop in under a larger drop, but current conditions prevent me from taking a more aggressive stance. Price action could still induce additions to my short line, but we'd have to head down pretty much immediately. Here's what I would be looking for:
The late-April low was the first pivot after the month's trend was broken. A return to that price without setting a new advance high would confirm underlying weakness. I would short any defense of that line as it is likely to fail.
Mining shares got knocked for 3.7% under the double weight of falling precious metals prices and a sinking stock market. I'm going to show you what everyone is looking at and also why they are wrong:
An A-B-C correction should get technicians all lathered up about a neckline break while we fundamentalists buy the shares they are selling for the move higher.