Price pattern sentiment indications and upcoming expectations

Unfortunately, the depth of the pullback in the GDX has caused me to become concerned with the complex. While GLD and silver can still be looked at bullishly, the overlapping pattern in the GDX has now increased the probability that the GDX can fall back down towards the 17 region by year end. I know this is not what metals bulls want to hear, but I have to abide by what the patterns are telling me. And, at this time, they are telling me I have to become more cautious as long as we remain below 28 in the GDX.

Ideally, I would still want to see the market rally up towards the 26.50-28 region before we begin to drop later this year. But, if we break the 22 region before we are able to climb towards the higher target, it opens the door to a potential slide earlier than I ideally want to see. Moreover, it would take a strong break out through 28 to take this potential off the table, but I really do not see a highly reliable pattern at this time to suggest that can happen with a high degree of probability.

Lastly, should this decline take shape on the GDX, it opens the door to silver making a low that is below the one struck in 2016.

So, the action seen recently has set up a potential trap door in the complex, which may open before the end of the year. One may want to consider protecting their profits/portfolio as we move into the last quarter of the year.