Taking Gold Miners One Step at a Time

Much like momentum stocks of late, gold miners are seeing the upside action cool off considerably this week. 

Gold (and its derivative plays) typically enjoys bullish seasonality in September. So we may simply be seeing the pause which refreshes right now. When you consider the ferocity of the uptrend since a false breakdown in January of this year, illustrated on the GDX (senior gold miner ETF) daily chart, below, it reinforces the idea that we could easily be in the early stages of a new bull run for precious metals and miners. 

But taking things one step at a time is still likely correct, given how volatile they can be when they do correct. 

Regarding GDX specifically, a few short-term open gaps had already been filled. But the light blue line denotes a fairly obvious open gap still, down at $25.67. It is not necessary to fill that gap, of course. 

However, I would factor that potential into any risk/reward equation if you are going long and strong right here, right now. Incidentally, I would prefer that gap does get filled to set up the next leg higher in autumn, as it likely would effectively shake out a good deal of longs without violating much in the way of the strong uptrend since late-January.