In December 2024 with GDXY trading at the 42 region we forecast it could target 89/90.
Why?
The presumption was that GDXJ would trigger a Cup and Handle pattern at 55 perpetuating a strong advance
Last week GDXJ struck a high of 92.42 for the move.
95 is 180 degrees opposition late December (the 2024 low for this run)
Last week was the 7th week of a parabolic move.
It shook out starting Tuesday ultimately turning its 3 Day Chart down on Thursday leaving a textbook
1 2 3 Pullback/180 buy setup.
GDXJ exploded on Friday gaining 4.40 on the day.
It was the largest range day in at least two years, reminiscent of the surge on October 18, 2024 two days from a meaningful high: GDXJ dropped for 10 weeks from 55 to 42.
13 points or 24%.
Today, to put that in perspective, equates to a drop of around 22 points taking GDXJ back to 70.
Interestingly there’s some good synergy with that idea as 70 ties to the last breakout in August 6.
The low just prior to that breakout is 64 on July 31.
360 degrees up is 99 is GDXJ wants to put on a further stampede.
But at the same time an A B C corrective move could play out first with a C wave down to the 84 region and the 20 DMA which has been left untested throughout this parabolic run.
In other words the possibility is that GDXJ had an A Wave down into Thursday, is in the progress of a B Wave with a C Wave on deck.
Keep in mind that the metal complex has been in a bull market for 10 years. since December 2015.
The Decennial Cycle is going to exert is influence.
It’s not if, but when.
It may well be that the next correction sets the stage for that final rally of this cycle.
It may be that the 4th wave decline I expect is of a smaller degree and that a major 4th wave decline is on the horizon. The good news for metal bulls is that after that large 4th wave decline a major advance should unfold.
It is worth noting that 5th waves in commodity markets are generally larger than 3rd waves.
The bad news is that we are all eager to position for that major advance and Mr. Market knows that.
It will punish those that are too soon.
IF a major 4th wave plays out (not the smaller corrective one that may be on the table) it could play out for a large part of 2026.
Remember metals were not immune to the stock market crash in 2008.
GLD gave back all of its SEVEN week parabolic rally into February 2008 bottoming in October 2008.
In today’s market that would rhyme with a roughly 80 point give-back in GLD.