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.