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Over the past 90 days Gold (GLD) is flat, Gold Miners ETF (GDX) is down over 14% (SPY up 5% in the same time window). Many studies reflect that miners are oversold compared to Gold, which happens to be true, yet the bottom line is this….GDX continues to see more sellers than buyers.
Concern for GDX is due to…..Numerous bearish wicks (shaded in red) reflect that GDX attempts a rally and sellers come rushing in.
GDX needs to hold just below current prices (the April/July 2012) lows or a good deal of sellers could come forward and push GDX a large percentage lower. That double bottom needs to hold in GDX!!!