Gold Bugs Not Quite Out of Business Yet for Christmas

As ugly as this sell-off in precious metals and miners looks and must feel for longs, the reality is that the metals and miners are still above their 2015/early-2016 respective lows. As such, the case for a bear market bottoms is still in play, even if it is under duress at the moment. 

On the GDXJ (ETF for those wildly volatile junior gold miners) weekly chart, below, if bulls cannot muster a reversal right here, right here, then a move down to $28.50 is likely in the cards. 

As you can see, $28.50 marked significance prior support in 2014, then resistance over the last two years or so. Simply put, gold bugs need to make their stand down there or risk a fresh leg down to new bear market lows, wreaking havoc on the many new longs betting on the bottom holding. 

First things first, though. If gold bugs can weather the storm of the Dollar surge and hawkish Fed here without breaching prior lows, eventually finding some stabilization, it could easily galvanize them into the new year. 

None of this is much consolation if you are riding the miners down on the long side from much higher prices, which is why we preach stop-loss discipline for Members on a daily basis, as well as awaiting signs of actual evidence of support (i.e., buyers stepping in and holding)into pullbacks in lieu of blindly and boldly assuming theoretical support will hold.