The Key Reason Why The $GDX Pop Won't Last The Market Vectors Gold Miners ETF (NYSEARCA:GDX) has soared in the last few months. The ETF traded as low as $12.40 in January 2016 only to climb to a high today of $23.06. This is a whopping 86% in less than 3 months. While many investors are jumping on board the gold miners there is a dead-on signal they are a short here. It is one of the simplest chart comparisons out there. All you need to do is compare the SPDR Gold Trust (ETF) (NYSEARCA:GLD) to the $GDX chart. You will clearly see that recently gold ($GLD) has not taken out the recent highs while $GDX has soared to new highs. What does this mean? It means that the gold miners ($GDX) are being squeezed. In other words, a lot of the upside is short covering. Short covering will not last. In fact, a possible doji today on the daily chart of $GDX may spell the top. Note the charts below to understand fully. However, the bottom line is that the $GDX will likely pull back below $20 in the coming weeks. That is an over 10% drop. Gareth Soloway InTheMoneyStocks
S&P Approaching Key Trend Line: Markets To Meet Major Resistance The $SPY is quickly approaching a trend line shown in the chart below. Notice how it connects through all the highs extending back to the all-time high on the $SPY in May 2015. In other words, the markets are testing a level/trend line that began almost a year ago. Truly epic and should cause a major battle between bulls & bears. The $SPY has rallied over 15% since the February 2016 lows in one of the biggest moves (in a short period) since the 1930's. Gareth Soloway InTheMoneyStocks
$SPY Slams Into This Epic Trend Line: Look At This! The S&P 500 has been a wrecking ball, blasting through resistance after resistance over the last two months. In all, the markets are up 15% from their lows in February. A level is now being hit by the $SPY that is more major than many of the last resistance points. If you connect the highs stretching back to the all-time high on the $SPY from May 2015, it creates a perfect trend line which is now being tagged. Note the chart below. Will this be a level for a pull back? Ultimately, in normal market conditions it would be an epic pull back. However, with the Federal Reserve continuing to wave the white flag and volume remaining near the lowest levels in a decade, it is not as easy to call as usual. Ultimately, as chartists we have to trust the chart and believe a pull back is near. Gareth Soloway Chief Market Strategist InTheMoneyStocks
