Where To Gold Miners?

Gold and silver miners have been on quite a tear lately.

Are they starting a new uptrend, or is this just another downtrend fake out as we've seen time and time again over the past 10 months?

The chart below shows the Raff Regression channel from the peak in October to the present:

Note that the Raff channel contains all of the daily market action from October until the middle of July.

At that point the 9, 20 and 50 day EMAs converge before a brief dip that forms a higher low.

With recent price action, it is my view that a new Raff channel has formed that is tilted to the upside.

While is is quite early to say this with certainty, volume, the MACD, and RSI seem to support a continuation higher.

Bear in mind that gold is a thermometer that can measure the health of the financial system.  

With its recent activity and the higher yields in the American bond market, perhaps market is trying to tell us not all is well with either the banking system or economy.

Those expecting significant bond tapering may be disappointed as the charts hint at a weakening US dollar which could imply even more QE despite the taper talk.

A few more months of data should seal the deal of taper or QE.

We will remain vigilant and not presume upon the market, for it teaches severe lessons to those who presume too much.