Day Two

As we have discussed in recent blog posts here and with Members, it is worth keeping a close eye on any dips the precious metals and mining complex has this week.

Specifically, after such a high buy volume breakout which initially ignored overbought conditions, as illustrated by the righthand side of the GDX (ETF for senior gold miners) daily chart, updated below, we now assume that one-to-three day contained pauses or dips we be met with another round of fresh buyers. If that does not happen, and miners slide below $23 on heavy sell volume, it would call the entire bull thesis into question beyond the rally we saw this month. 

Clearly, leaders in gold miners like FNV GFI KL WPM are all worth of our attention into these initial dips, but IAG versus its 200-day moving average, which is green here and holding steady, may be as defined of a "tell" as any in the group.

In other words, so far so good for gold bugs on the initial pause, with perhaps another day or two to work through before the sector is ready to uncoil higher yet. True, we want to keep one eye on the U.S. Dollar to see if it either stays rangebound or weakens. But at a certain point gold and her miners must stand on their own merits, with silver eventually willing to catch-up. 

As for equities at-large, some bright spots today in chips, for example, are being offset right now with red/flat IWM and healthcare/bios like GH NTRA taking it on the chin today. A strong final hour in those two latter parts of the tape would likely do wonders to ease concerns about small caps and healthcare names into the end of this week.