The gold miners are in a tough spot right now as the sector struggles to find its footing after a rough few weeks. The GDX is currently sitting just below the 50% retracement level of the January 2016-August 2016 rally:


GDX (Daily - October 2015-March 2017)

This is a messy situation without a clear trade setup and the likelihood is that we are in store for some more choppy action before a clear directional setup is put in place.

Interestingly enough today's candlestick formed a bearish outside reversal with a 12-period ROC of -11.4%. Normally with a bearish outside reversal we would expect backtest results to be pretty bearish. However, the backtest results from similar instances actually aren't bad at all:

Albeit this is a fairly small sample size and the majority of instances are from the 2008-2009 Global Financial Crisis period which saw enormous whipsaws of volatility. The main takeway is that the goldies are in a bottoming process and looking to find their footing. We could see a strong move higher tomorrow following the Fed announcement, or a sustainable bottom could still be weeks away. We can't know but we can be prepared to take action when a suitable setup presents itself. 

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