Could historical outflows present an opportunity in the gold-mining sector? According to Sentimentrader.com, outflows from Gold Mining ETFs GDX and GDXJ topped $800 million on Wednesday, the largest single day of outflows in history.
The GDX chart below shows at which price points the massive outflows took place.
The long-term trend since the highs in 2011 is down (lower highs and lower lows). The 15-month trend appears to be higher, as GDX has created a series of higher lows since early 2016.
GDX is testing 1-year rising support at (1), which could be support for a bullish ascending triangle pattern. Two thirds of the time, this pattern suggest higher prices.
While It's way too early to tell if investors panicked on Wednesday's outflows, what happens at (1) will be very important for the mining space, indeed, more important than outflows.