GDX on the move

GDX broke out of its recent range to the downside on Friday 4/20/12, so it appears ready to move again. Even with the downside break, the direction this move will take is not clear yet. The same chart is shown twice below with different possible outcomes. The key here is to be ready for either one.

The chart above clearly shows the descending triangle which formed over the past seven days and decisively broke to the downside on Friday. Descending triangles are nearly always bearish and this one proved no exception. Descending triangles also have measuring implications to tell you where to expect the next bottom. This is done by subtracting the base of the triangle ($46.39) from its highest point ($48.33) and then subtracting the result from the base to get the target for the move. Here is the math:
48.33 - 46.39 = 1.94
46.39 - 1.94 = 44.45
$44.45 is the target, but this is not set in stone.
In fact, there is an alternate possibility shown below.

As long as GDX remains above the old low of 45.98 there is the possibility that the last seven days have formed a bullish flag and a new uptrend could begin from here.
I favor a downward move to new lows first, mainly because it give more precise entry points for buyers. Such a move could also provide a needed wash out of sellers to produce a good rally.
In any case, this correction has been going on for a long time now and it is likely that a new uptrend could be substantial and long when it starts.
Happy trading.