Gold Miners Set For A Move

Yesterday, GDXJ, the junior gold mining index, left an NR 7 Volatility Contraction Day.

This is the narrowest range in 7 days.

These contractions in volatility are usually followed by an expansion in volatility in the next few days.

Interestingly, yesterday’s tight range came in the absolute apex of a 7 week triangle formation.

A breakout is coming — one way or the other.

What most traders are not aware of, however, is a whiplash pattern that often plays out from these triangles.

Often an item will breakout one side of the triangle only to reverse quickly and breakout the other side.

I call this a Triangle Pendulum.

It sometimes signals powerful moves because false moves can lead to fast moves.

Additionally, this triangle is 7 weeks long. 7 week cycles are important as the year is comprised of 7 seven week cycles.

So, the miners look coiled. A sustained breakout should see GDXJ make new highs on the year.

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