BOUGHT !

In yesterday's post I described the various support levels under the current (yesterday's) price. The first support was tested from above and underneath for several hours before it finally broke and when it broke, it plunged. The plunge was said to be because of the release of the last Federal Reserve meeting minutes and the lack of discussion about QE 28 (or whatever number we're on now). We know that it would have happened anyway and that was just the excuse.
The second support held beautifully. GDX went $0.07 below and turned up on very strong volume. HUI went $0.15 below and also turned up nicely. I bought right after the bottom as soon as the turn was confirmed.
Here are the charts for both:

I was expecting this turn because of the very nice inverse head and shoulders which was forming on the charts. This pattern occurs several times a year at major turning points and comes with the advantages of predictable turning points and nice tight stops so there is relatively little risk to the trade. These trades do fail at times but they have a remarkably high success rate of near 80%. As long as you keep a stop loss price in below support, the trade is very safe.

As you can see, the chart for HUI is very symmetrical, with a nice flat neck line. This bodes well for the trade. The shoulder support can be tested several times over the next few days, but often it is hit just once and away it goes. It looks like a five wave decline so it could go up part way to the neckline and then come down to violate today's low slightly before turning higher, creating a multi day flag. I will not be too quick to raise my stop price.
Happy Trading.