In theory, nothing changed for the precious metals market yesterday, but in reality, it was the opposite, thanks to the signs from the USDX and stocks.We just saw a combination of verification of the breakdown below the rising support line and an intraday reversal. Both are bearish developments, and their combination indicates that lower – likely much lower – stock market prices are to be expected.
Also, please note the red rectangle – it shows how weak mining stocks have been compared to what the S&P 500 did – extremely so. When stocks declined earlier this month, miners declined significantly. Consequently, the above points to much lower mining stock values in the near future.The USD Index did almost nothing in terms of the daily price changes, but this nothing was meaningful.
Another day, another decline in the junior miners. That's the new reality. And with just a small push, the waterfall selling will start.The rising, red support line was broken, and the breakdown was verified last month, so it's already quite clear that the next big move is to the downside. There is, however, another support line that is particularly important at this time.
On a very short-term basis, we might see a correction from the previous 2023 low close to $33. Why? Because – as I wrote above – the breakdowns below the neck levels usually need to be verified by a corrective upswing – oftentimes back to the previously broken neck level.Zooming in confirms this scenario even more.
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