Ideal Precious Metals Complex Pull-Back “Buy” Levels (where I would ideally cover my hedges)

“Ideally”, that is. Because how often are markets ideal? But this is what I am looking at. Currently, I am still operating to the HUI 375+ plan, which if correct would mean that the rally is ongoing and we’d be charting pullback levels within an uptrend (i.e. buy opportunity and/or short-covering opportunity).

Going back to the daily chart of GDX that we have used all year to gauge and manage rallies and pullbacks, I am looking at a potential pullback to the 50 day average (blue) and any point above the October 9th low at 38.79. Although please note that GDX is at short-term support right here and now. That could contain the pullback, but a deeper pullback would be healthier.

RSI was in need of a pullback, but is intact to its uptrend channel. MACD needed a reset as well.

As a side note, if unexpectedly this is a rally-terminator pullback, that improves our longer range view because the sector will not have become overbought and vulnerable to the broad market at HUI 375+ or, gulp, 500. It will have pulled back from a garden variety overbought, over-loved situation. Not a bull-killer.

Silver, by the same token, is pulling back after just missing the target at 35. This is logical too, in that the newly formed pattern probably was not going to express up to its measurement at 38 (our upper target range is 41) all in one gulp. If it had, the hype and momo/FOMO would have been dangerous.

There is technical potential for a pullback in silver to 32.20 or even to 31, toward which the 50 day average is rising.

As for gold, if we assume the major target of 3000+ is still on plan, a short-term pullback to support coinciding with the (dotted) daily EMA 20 should be doable. If things get more dramatic, the firmly uptrending SMA 50 would be a point of a higher low to the October 10th low of 2603. Either way, it’s “bull intact”.

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