$GDX – Quick Update
In this quick update, we take a closer look at GDX as recent price action begins to test key assumptions. By examining candlesticks, Elliott Wave structure, and underlying technicals, we assess whether the current move supports continuation or signals rising risk. The goal is to clarify the potential paths ahead—and the levels that will matter most if conditions change.
CANDLES
While no decisive move has occurred yet, the current setup warrants increased awareness of potential risks. The past two daily closures produced candlestick formations that deserve close attention, with today’s Harami/Hanging Man carrying a non-trivial probability of evolving into a meaningful topping structure.
The October pullback, while notable, did not fully reset the overextended technical conditions on the larger frames, and GDX continues to exhibit a converging price structure. From an Elliott Wave perspective, the advance since early November has been characterized by extensive overlap across nearly all intermediate upward waves. This behavior, combined with a narrowing channel, is consistent with the development of an Ending Diagonal and suggests that price may be approaching a terminal point.
If this interpretation proves correct, a relatively swift retracement toward the level of origin—potentially on the order of a 25% drawdown—would not be unexpected. In this context, precious metals investors should remain attentive, as the risk of a surprise reversal is elevated.
Happy Trading!
