$22.50 is the key level in GDX

Prices are attempting to breakout above the 10-day EMA. If we close the day above $21.30, we will likely rally to retest the underside of the neckline at $22.50 next week. If prices are unable to break decisively through that level, then they will turn down and head to new lows.

-BULLISH CASE- If prices can sustain a breakout above $22.50 then we have reached a low, and a new intermediate cycle higher has begun.

-BEARISH CASE- If prices are unable to retake the $22.50 neckline, then we could see a sharp move below $20.00 and down to the $15.00-$16.00 head-and-shoulder price target. Note: The September correction was similar in form and duration.

I’ll probably wait to see if prices can breakout above $22.50 before taking a position. If prices fail and begin to rollover, I’ll enter shorts.