In the daily candle chart below, you can see how this week the miners failed at a confluence of resistance. Over the past four trading days the miners tested but failed at their 50-day moving averages. In addition, GDX failed at $26, which was previous support. Meanwhile, GDXJ failed at $43 which was also previous support.
The weekly charts give a cleaner look at the aforementioned failure as well as what should be strong support. Note how GDX tested and failed at $26 and is likely to close the week below weekly resistance at $25. It has downside support at $21-$22. GDXJ tested $43 and will close the week well below that resistance. It has downside support at $33-$35.
The gold stocks are ripe for further selling given recent price action and their weak . Nevertheless, the market has almost priced in the Fed rate hike (79% probability as of yesterday) and another round of weakness in the gold stocks would likely lead to a buying opportunity and strong rebound. As we noted last week, this correction could end up like the 2002 correction in terms of price and the 2001 correction in terms of time. Our downside and buy targets are GDX $21-$22 and GDXJ $33-$35.