The Junior Gold Miners ETF (NYSEARCA:GDXJ) have taken their lumps over the past 3 months. The ride has been volatile and included a couple of steep declines.
The most recent decline comes on the heels of a drop in gold prices (NYSEARCA:GLD). Note that the senior gold miners (NYSEARCA:GDX) didn’t get hit nearly as hard.
BUT both rallied hard during the second half of last week.  Could the rally have legs?
The big question here then is:  Is the correction in the Junior Gold Miners ETF (GDXJ) providing an opportunity?
The chart below looks at the performance of GDXJ over 3 month windows since it began trading.
From top to bottom, GDXJ declined almost 25% (during a 3 month span). Looking back at historical precedent, it appears that GDXJ is closer to a trading bottom (than a top).
Below is another chart looking at the pattern of GDXJ vs the GDXJ/GDX ratio.
These charts help to explain the rally that started this past week.
Thanks for reading and have a great weekend.
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