Gold Miners-GDX/GDXJ Update

This may be a bit of a hint, miners are not very well correlated to the market, they are better correlated to gold and gold is better correlated to the market, so in a round about kind of way, even though both gold and miners have been underperforming the market recently as the market has been toppy, this may be a bit of a hint to pay attention to. While I'm updating mostly GDX, GDXJ looks better than GDX in most timeframes, so whatever you see in GDX, you can safely assume GDXJ (Junior miners) look better.

 Let me start with the 5 day chart of GDX and make clear I am in no way bullish on miners when looking at the longer picture and trend, they look like they've topped and are already starting stage 4 decline, that being said, some of the sharpest rallies in the market occur during downtrends (bear market counter trend rallies).

 GDX broke below a bearish descending triangle, the question now is whether this break below is being used to set up shorts for a bear market rally/Short Squeeze. Today's early movement in GDX at +2.2% now on volume is impressive and as mentioned, if you follow the dots to gold and then to the market, this may be material in our short term analysis of market direction, while out long term analysis I feel is pretty solid.

 Intraday the volume is on track for a big volume surge.

 The 3 min trend reveals a very flat range yesterday, this is a typical area to see accumulation, smart money doesn't chase, they buy at lows in ranges or as the market moves lower and usually they are very quiet about it, the leading positive divergence from yesterday is pretty impressive and judging by today's move, was intentional, not coincidental.

 The 5 min is leading positive in a big way.

 The 15 min has shown several positive zones, in my view there's no reason to run a counter trend rally if it doesn't squeeze the shorts out.

 The 30 min chart has looked good for some time, it looks even better now.

 And the 60 min chart also looks string and this is an important timeframe.

 As mentioned, to squeeze shorts I would think that the descending bearish triangle would have to be taken out on the upside to make the move worthwhile.

 Here are just a few charts of GDXJ so you can see the strength there in 3C, 5 min

60 min.

We'll take a look at my two least favorite assets to analyze, GLD and SLV. GLD recently has shown some correlation to QE3 expectations or sentiment as gold would be one of the biggest beneficiaries of more money printing.