Elliott Wave 5.0 "Reboot"

Wednesday, February 10, 2016

GDX Gold Stock Review: Just A Correction Or Is There More To It?

GDX has now backed off from its rocket ride. It also formed a small spike in the process, but I think we need to see a much bigger correction if this bull run is to remain a bull run.   Starting from the bottom of January GDX made about a $5 run, leaving many open gaps to the downside. 
At $14.50 GDX would be at about  61% (.618) net retracement price level. 

The choice is simple at this time, because if we are only in a correction no new lows can form, but if this move is still part of the bear rally,  then this spike will get retraced by 100% or more.  Every false bearish rally gets retraced.  It does not say that much in the book, but I use it as a rule all the time.  

Expanded flats work just like this, except we have to look at it from an inverted point of view. The  largest degree I am showing is in Minute degree, but eventually it may have to be changed.