Following the almost expected fake-down (false break below the pattern), GDX reversed sharply back inside the symmetrical triangle pattern with the usual reaction off the initial tag of the downtrend line. The primary scenario in SLV posted on Tuesday seems to be playing out so far, with SLV closing at the top of the wedge yesterday while the next buy signal on GLD will come on a breakout (60 minute close) above this descending triangle pattern.


With both GDX & SLV kissing those key 60-minute downtrend lines shortly before the close yesterday, it is not surprising to see the pullback that immediately ensued carrying thru into the pre-market session today as reactions are typical off the initial tag of key resistance levels. Keep in mind that although call the GDX is  the "Gold Miners EFT"  many of the components are largely engaged in mining silver as well, such as Silver Wheaton Corp, Pan American Silver Corp, & First Majestic Silver Corp. Therefore, when trading GDX, one should always keep an eye on the charts of GLD as well as SLV.

For those who also favor an upside resolution of these patterns, there are a couple of ways to play this:

  • Traders that took positions in SLV or GDX when they were posted as objective entries at the bottom of the patterns on Wednesday morning, might take the somewhat aggressive strategy of adding to their positions here on a pullback (assuming that the pre-market losses aren't reversed by the open, which is quite likely), or...
  • Wait until all three (GLD, SLV & GDX have clearly broken above their respective downtrend lines (using a 60-minute candlestick close for confirmation). This option would offer a slightly less favorable entry price but with a higher success of the trade playing out.