GDX on the precipice

GDX has reached the decision area. What it does in the next few days could determine its direction for quite a while. If you look at a GDX chart you will see that it has not quite reached the bottom of the megaphone pattern. This is deceptive because the HUI index is sitting right on the bottom as shown in the chart below:

Chart courtesy of StockCharts.com

If the HUI breaks through the bottom and stays below for several days, it could signal the start of a very large decline in GDX as explained in the March 14 post.
GDX made a very weak looking, two day flag ending on Friday so we do have the possibility of rising up off this bottom once again, but it is time to be careful.
I wrote the above on Sunday evening and now it is 3:00 PM Monday. The small, two day flag broke out to the upside, but only for a few minutes, before falling back in this morning. It now appears to be a bearish pennant, which would imply another move down if it breaks down. It has not broken yet, but is very close right now.
Happy trading.