Gold Miners Setting Up a Volatility Bounce

This is one of those trades that I would use options with for a quick gain.

 A weekly chart shows the large top GDX recently broke below.

 However since breaking below, GDX has sat in a consolidation. The trend has been for a volatility shakeout of the shorts that entered on the break of a large top, this one appears to be no different.

 The 30 min 3C chart shows a clear positive leading divergence in the consolidation area.

 Since seeing strong distribution and breaking support, the 30 min chart's positive divergence has bled through to the 60 min chart, this implies a pretty strong bounce.

As the consolidation (confirmed by volume) is already a descending triangle (bearish bias), short traders will be looking for a break below support at $46, that is where we should see the short term 3C charts go very positive and see a reversal of the head fake break down and a likely move through $49.50-$50. Using calls, with a good timing signal such as the break of $46, this should produce a very nice gain using some calls.