GLD, SLV & GDX

Gold and Silver have had an interesting correlation with the market, the larger trend the PM's have essentially tracked the market, but it is the corrections with in that trend that they share an inverse (move opposite each other) relationship which actually works out pretty well for the expected move in the PM's to the upside (shorter term) and also works out good for the probability of strong relative performance in the PMs for the move.

The fall in Gold and Silver late Tuesday night may have been one of the best things to happen for the long positions there believe it or not. I'll show you with the futures for gold and silver ...

 This is YG (Gold futures) 15 min which had a divergence in place before that drop overnight as China opened, however look at how much stronger the divergence became after the drop, this can all be understood if you read the two articles I wrote, "Understanding the Head Fake Move" which are linked on the member's site. In this case it doesn't really matter whether it was a head fake move or not, it was treated the same way, the stops were hit, supply became abundant at lower prices, no one really pays attention to the larger volume and the fact that somebody is on the other side of that trade, most traders just see the ugly move down, the increased volume and thin, "That makes sense" and give it no further thought. 

I've long said and wrote in the articles which also explain why head fake moves tend to be the last thing that happens before a reversal, that stop runs are some of the most effective places to accumulate precisely because large positions can be put together quickly without any one questioning them as they expect to see the volume on a move down like that; it's so perfect, so obvious, yet it happens day in and day out right under traders' noises and they never think twice about it.

This is silver futures 30 min chart, again the drop did wonders for the 3C chart. I said I think these will see better relative performance, I don't think it extends the time of the move by much, we still have to be realistic about the size of the accumulation zone, it's not going to support a primary or intermediate trend, far from it.

 GLD intraday on the open, initial small distribution to knock prices down and positive divergences in to the gap fill.

GLD 3 min, I think the more powerful divergence after the move lower is obvious.

 And specifically the 3 min chart primed up pretty well today.

SLV 3 min, also primed well today, they are both in good position to lift off from this area.

 SLV's 15 min trend including distribution sending it lower and a positive divergence, I don't think this is THAT material to this particular move other than perhaps relative performance, I do suspect that this is the start of what will be a larger divergence that will likely fire to the upside around the same time the market is finished with all upside business and ready to make its debut as a Primary Bear market.

 As far as how big the "process" for that larger trend that syncs with the market collapse, I'd say there are two areas that could be considered as the start of the base, to the left at the yellow arrow and to the right at the orange. In both cases there's still quite a bit of formation to go, I'm guessing based on an estimation of the market trends, that the base will more likely be considered to start where the orange arrow is and I think 3C would support that view; it would simply take way too long for a base starting at the yellow arrow to finish up and beyond that, the move it would support I believe is much bigger than any I expect from either PM.

 This is GDX-Miners , 1  min, did the same as the other two with an initial small negative on the open and accumulation of the pullback.

The 15 min chart is more impressive in quality than size, another reason I lean toward better relative performance over a longer move.