by Jordan Roy-Byrne, CMT
The Daily Gold
The failure of Gold and gold stocks to sustain recent gains coupled with a strong selloff to close the week dashes any hope that the correction ended last week. The charts and probabilities argue that the sector remains in a larger correction and perhaps has started the C portion of a typical A-B-C (down-up-down) correction.
This week started out strong for the miners but that strength faded and was completely reversed with Friday’s selloff. GDX and GDXJ closed down 3%-4% for the week and left nasty bearish candles on the weekly charts. GDXJ, which made a low of $41 last week could test at least $39 while GDX, which tested a low of $25 last week has downside potential to $22.