The Golden Runaway Rally That the Market Missed

[Trading With Larry Benedict]( The Golden Runaway Rally That the Market Missed By Larry Benedict, editor, Trading With Larry Benedict After a strong rally at the start of 2022, the VanEck Gold Miners ETF (GDX) topped out in April and spent the next six months locked in a strong downtrend. By the time gold bottomed out in September, GDX was barely trading above its March 2020 lows – despite a backdrop of runaway inflation and the ongoing war in Ukraine. However, since hitting those September lows, GDX steadily rose higher. And on January 10, its rally had grown to almost 50%. But recently, GDX topped out again. So today, we’ll see what’s coming next… Recommended Link [Boost your retirement from $4 stock?]( [image]( A massive $130 trillion energy shift is underway. And this $4 stock is at the center of it all. It’s backed by 5 billionaires. And Ph.D. Economist and Investor Nomi Prins just put together a quick 30-second demonstration to show you why this tiny company’s breakthrough could touch every man, woman, and child on the planet and make you rich in the process. Watch the 30-second demo [here](. [Watch now.]( -- A Previous Pattern Repeated On the chart below, you can see how GDX peaked and reversed in April 2022. After hitting that high at ‘A,’ it was pretty much a one-way street down… VanEck Gold Miners ETF (GDX) ETF [Image] Source: eSignal That reversal in April occurred when the Relative Strength Index (RSI) and the GDX stock price started heading in different directions (diverging red lines). When buying momentum is declining like this, eventually, that will drag the stock price lower too – just as we saw here. Then the 10-day moving average (MA – red line) crossed below the 50-day MA (blue line), and both started trending down. That confirmed the next leg down. And the RSI bearishly remained in the lower half of its range (below the green line) throughout the entire down move. [Wealth-Building Secret Hidden in List of The 500 Fastest Growing Companies in North America]( However, the RSI then formed a ‘V’ from oversold territory (lower grey dashed line) in September (red circle). And GDX started to transition from a downtrend into an upward pattern. That emerging up move coincided with two bullish technical signals… - The RSI broke through resistance and gained traction in the upper half of its band. - The 10-day MA crossed back above the 50-day MA and started to accelerate higher. Take another look… VanEck Gold Miners ETF (GDX) ETF [Image] Source: eSignal But when we looked at GDX on [January 10]( (red arrow), that strong momentum had pushed the RSI up near overbought territory (upper grey dashed line). Any reversal there would have set GDX up for a fall. However, it was a repeat of the previous pattern from April 2022 that led GDX to top out at ‘B.’ As you can see, GDX continued to make higher highs (upper orange line) while the RSI was making lower highs (lower orange line). When this happens, we know that a change of direction is in the cards. So with that pattern causing GDX to reverse, what can we expect from here? Free Trading Resources Have you checked out Larry's free trading resources on his website? It contains a full trading glossary to help kickstart your trading career – at zero cost to you. Just [click here]( to check it out. GDX Is Headed Lower As you can see, after making those lower highs, the RSI bearishly dropped into the lower half of its range. Unless it can reverse higher, then this current down move has further to play out. The longer the RSI stays in the lower half of its band, then the longer that down move could be. I’m also watching our two MAs… After tracking above the longer-term 50-day MA, the 10-day MA has recently turned down. And it’s closing in quickly on the 50-day MA. If the 10-day MA crosses sharply below the 50-day MA and they both trend down, then that’ll add further weight to GDX’s down move. Regards, Larry Benedict Editor, Trading With Larry Benedict Reader Mailbag Does your outlook for the gold mining sector remain bullish or bearish for 2023? Let us know your thoughts – and any questions you might have – at feedback@opportunistictrader.com. IN CASE YOU MISSED IT… [Master Trader Reveals his One Stock Retirement Plan Stock Pick]( Hi. Jeff Clark here. I am going to reveal the one stock I use in my One Stock Retirement strategy that enabled me to achieve financial freedom early, at the age of 42. I’ve used it to profit during any kind of market condition, including complete market meltdowns. And you can get started with as little as $100. 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