The GDXJ/GDX (Junior/Senior Miners) Ratio can create meaningful reversal patterns and send important signals to the mining sector, at key inflection points. Did the ratio send an important signal to miners last week? Possible!
The GDXJ/GDX ratio has traded sideways for the past couple of years inside (1). The ratio has sent very few important messages to the bull or bear case since early 2017, while inside of this narrow range.
The decline of late has it near the bottom of this trading range where last week it may have created a bullish reversal pattern (bullish wick) near dual support at (2).
Bulls in the mining sector would receive a short-term positive message if a rally takes place at (2).
The bullish case would receive a concerning message if the ratio breaks below the bottom of its 2-year trading range at (2).
Keep a close eye on this ratio going forward as it looks like it could send an important message to the mining sector in the next couple of weeks!