In our most recent editorial we concluded by observing a few positives in the gold and silver stocks. W concluded with: “Their performance over the weeks ahead could give us an early hint as to how much longer the correction will last.”
Fast forward another week and a few positives has morphed into a handful of positives.
First let’s look at GDX. In the chart below we plot GDX and its advance decline (A/D) line.
GDX has essentially corrected for two months and it has yet to test the previous resistance zone at $24 to $25. It has bounced from $26 several times and established good support there. So it’s holding its gains.
The A/D line had been showing a positive divergence with its higher lows to GDX’ lower lows. However, this past Thursday the A/D line made a higher high. GDX itself isn’t close to making a higher high. That is a strong positive divergence.
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