GDX Update - where gold goes so goes GDX

I'm still looking for evidence on whether the next, all important gold breakout is going to happen right now or not and I still don't have a perfect case either way.  On the way home from work today (yes, Sunday...), I noted Shell regular gas at $2.93.  Gas prices have been dropping faster than Miley Cyrus's clothing at a media shoot.  This is not inflationary.  This should not be good for gold or gold miners.

Of course, perhaps it is temporary.  And in fact the new chart I just found on the web site of my new BFF (FRED) indicates that this might just be a 4th wave pullback.  It would explain the rapidity of the move.  If this model plays out as shown below then in another few weeks gas should bottom at perhaps $2.60/gallon in Texas (higher in other places):   Perhaps the rapid oscillation of this 4th wave is what is causing such a weak read in my normal indicators.  If so then clarity should return pretty soon as this wave either confirms it is a 4th wave or it breaks down into something else.

Like gold itself, the gold miners ETF (GDX) is very near having to either break out or break down.  This chart is decidedly more bullish than the gold chart.  As long as that declining double bottom holds, GDX is golden.  And if that top resistance line cannot hold then look out above.

One more thing to keep in mind: the market is especially tricky when it is near reversal points.  I think the result is that something unexpected happens and instead of simply understanding that a breakout or break down occurs, the market just sits there in shock and awe and watches as the train leave the station.  By the time they realize what happened, they think it is too late to get in and so they watch the train get smaller and smaller down the tracks.

If GDX breaks out and gold breaks out then they will self-confirm the breakouts (as opposed to needing to look for a back test, kiss goodbye, etc.).  Having multiple confirmation points (gold, silver, GDX, gas) all going up at the same time will be a confidence builder for the owners (or future owners) of these assets.

I'll be keeping a close eye on these assets over the coming weeks.