By Chris McKhann , analyst at OptionMonsterOne key exchange-traded fund for metals and mining stocks has dropped sharply in recent weeks, drawing put trading. The SPDR S&P Metals and Mining ( XME) ETF dropped more than 5% Monday to close at $34.15. This is double the price at the low back in November, but a far cry from a year ago when the price was up above $87 at its high. Shares were in a steady and sharp uptrend from early March until early June, when XME got up above $43. The pattern now in development looks to be a "head-and-shoulders top," with a neckline around $35 and a potential target down around $28. The options trading started with the July 30 puts, in which 5,000 were bought in the same second for 40 cents against open interest of 1,448 contracts. Then we saw 2,000 of the August 34 puts bought in two blocks, one for $2.95 and one for $2.90. As always, this type of put buying could be protective in nature and bought against long stock. But we don't see the volume, and given the technical picture, this looks like outright bearish speculation.