Gold & Silver Mining stocks facing triple kiss of resistance test

xau kiss of three resistance lines may 23

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The XAU Index is the oldest Gold & Silver mining index in the states, as it started keeping track of Gold & Silver mining stocks in the early 1980’s.

With this index having such a long history, it allows any of us to do pattern analysis going back 30-years. This chart looks at the XAU index over the past 20-years.

Miners have experienced a strong rally so far in 2016. This strong rally has the index kissing the underside of potentially three resistance lines at the same time at (1) above.

As we all know, coins have two sides to them. Bullish price action would result if mining shares can push higher and break above this resistance zone.

Concerning price action for mining stocks would take place if selling pressure started taking place at (1).

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Silver hits triple resistance, this a melt down point?

silver slv resistance  may 19

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This chart was shared with Premium and Metals members yesterday afternoon.

The chart reflects that Silver and Silver ETF (SLV) are both testing triple resistance, inside of a falling channel at (1) above.

We also shared that this resistance test was taking place at the same time that “Dumb Money Traders” has amassed the largest long position in Silver, in all of its history.

This is a dangerous setup for Silver, should weakness start taking place.

If you would like to stay abreast of these type of patterns in the Silver, Gold and Mining sector, I would be honored if you were a Metals or Premium Member.

 

Optimism would come forward if breakouts happen here-

monkey catching an elephant

Over the past year, a few sectors (Transports, Bio-Tech, Banks and Russell 2000) have been weaker than the broad markets. For the broad market to move higher, “Risk On” traders/investors want these weak sectors, to start reflecting some strength.

Below looks at the patterns of these downside leaders. As you can see, each as created a series of lower highs since 2014/2015.

Will the third time be a charm and these sectors break falling resistance?

weak sectors creating series of lower highs may 17

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To help push the broad markets higher, these sectors need to start reflecting some strength/break falling overhead resistance.

Each sector is testing a support zone at (1) above, not far below falling resistance.

To be optimistic about the broad markets breaking out to new all-time highs, traders/investors want breakouts to take place in these downside leaders over the past year.