GOLD AND SILVER MINING ETFS CONSOLIDATE IN UPTRENDS -- BOTH ARE ACTING BETTER THAN THEIR RESPECTIVE COMMODITIES -- SILVER STOCKS ARE DOING MUCH BETTER THAN GOLD MINERS -- SILVER LEADERS ARE COEUR D ALENE MINES, SILVER WHEATON, AND HECLA MINING
MINER ETFS LOOK POISED TO RESUME UPTRENDS ... One of the ways to determine the technical condition of precious metals is to look at how their stocks are performing. Chart 1 shows the Market Vectors Gold Miners ETF (GDX) in a "wedge-like" correction within two declining trendlines and testing its 50-day average. That corrective pattern looks like a normal pullback in an emerging uptrend. It also remains above the support line drawn over its June high. The GDX:GLD ratio below Chart 1 also shows that gold miners have done better than the metal so far this year. Silver stocks are doing even better. Chart 2 shows the Global X Silver Miners ETF (SIL) in a sideways consolidation pattern with a rising support line. That gives the SIL a stronger chart pattern than the GDX. The ratio below Chart 2 also shows that silver miners have done much better than the commodity this year. Both charts suggest that miners may be stronger plays than their respective commodities. Chart 3 is a ratio of Silver Miners (SIL) divided by Gold MIners (GDX). The ratio has broken out to the highest level in eighteen months. That suggest that silver miners are a stronger play than gold miners and may be the best precious metal play of all.
(click to view a live version of this chart)
Chart 1
(click to view a live version of this chart)
Chart 2
(click to view a live version of this chart)
Chart 3
COEUR D ALENE MINES AND SILVER WHEATON ARE SILVER LEADERS ... Two of the strongest silver stocks are shown below. Chart 4 shows Silver Wheaton (SLW) consolidating just below its spring high. An upside breakout would be a very positive sign for SLW and the entire silver group. Chart 5 shows Coeur D Alene Mines (CDE) testing previous peaks formed over the last year. An upside breakout would be a strong technical sign. Chart 6 shows Hecla Mining (HL) consolidating in a triangular formation between two converging trendlines. That's normally a bullish pattern. There are number of messages being sent by the precious metal charts. The consolidation patterns in gold and silver stocks bode well for their respective commodities, but even moreso for the mining stocks themselves. That suggest that miners are better precious metal plays than the commodities. And that silver stocks may be the best way to play a precious metal upturn.
(click to view a live version of this chart)
Chart 4
(click to view a live version of this chart)
Chart 5
