This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

Silver, Gold and Miners About to Sell Off Again

NEW YORK (TheGoldAndOilGuy.com) -- A couple weeks ago I posted these same charts talking about the pending breakout (in either direction) with silver, gold and mining stocks.

Fast forwarding to this week, it's clear this sector continues its struggle to rally. Key support levels are now being tested. If these levels fail, prepare for a sharp correction with mining stocks showing the most downside potential of roughly 25% for the Market Vectors Gold Miners ETF (GDX) trading fund.

Let's take a quick look at what is going on.

Gold Trading Chart:

The chart of gold shows price being wedge into the apex of the down sloping resistance trend line and the rising support trendline. Gold was trading below this level but has since bounced. But if gold closes the week below this line in the sand the price could start to fall quickly and test the $1,200 per ounce within a week or two.

Silver Trading Chart:

Silver is underperforming gold and trading below its support level currently. If silver does not recover by Friday's closing bell, then things could get ugly for a few weeks as investors start to exit their positions. That being said, I need to point out that silver is more of a wild card when using trend lines like this. Both gold and gold miners should be confirming this breakdown in silver if it is the real deal.

Gold Mining Stocks ETF:

The chart of gold miners I like the most. I like it because it's pointing to lower prices, roughly 25% lower if the breakdown takes place. Gold mining stocks could be a fantastic long-term investment if we see the $17.50 level reached on this GDX ETF.

Recently, I talked about ETF trading strategies and the big picture on gold, silver, miners and bonds. They look to be nearing a major bottom and once they do bottom it should be a great buying opportunity for specific stocks or the entire sector.

The next few weeks are going to be crucial for precious metals and we will keep an eye on them as this bottom unfolds.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.

Chris Vermeulen is founder of the popular trading sites www.thegoldandoilguy.com and www.ActiveTradingPartners.com. There he shares his highly successful, low-risk trading method. Since 2001, Chris has been a leader in teaching others to skillfully trade in gold, silver, oil and stocks in both bull and bear markets.

Select the service that is right for you!

COMPARE ALL SERVICES
Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!

Brokerage Partners

Rates from Bankrate.com

  • Mortgage
  • Credit Cards
  • Auto
Advertising Partners

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs