On April 4, I said:
There are some signs of weakness on this chart. Price is sitting at a confluence of weekly moving averages that are all pointing up, if this cannot produce a bounce in coming days either from here or a bit lower off the support shelf of 45, AEM will be in a negative technical situation.
On April 12, I said
I think a spike down can be bought for a speculative trade and a bounce, the closer to 45, the better, with a stop somewhere below the support. If 45 gives way, 40 is the next level, and stock will be most probably in an undesirable technical shape.
Last week, I said:
It may find enough of a ground around here to bounce off its oversold readings, just for a trade, but given the volume of the selling these past 2 days, I will be wary of hanging on to a long position for too long.
It happened just like the above!
My participation in the bounce so far has been brief as I did not want to hang on to a long position for long, and felt compelled to take the fast profit and step aside.
Both bearish and bullish counts are still open
The bearish count suggests that the latest drop was either a wave A or a wave 1, to which, for now, I assign an intermediate degree.
The bullish count suggests that the latest drop finished a major wave 2 flat, and we have started a major wave 3 that should take us to the heights of heaven.
Because AEM is in a mid-term downtrend, and because of the low volume of the bounce so far, I am still leaning towards the bearish count.
If we are truly dealing with a major Wave 3, there will be plenty of opportunities to join the party. On the other hand, if this is indeed intermediate wave 1 of major wave 3, then the low of April 17 should not be violated for a very long time.
Looking at a 60-minute chart
We see a text book bounce from a trend line going back to the lows of November 2008. And a rise to an area of congestion that held for days before the spectacular drop of April 16.
This is larger view of the 60-minute frame
I can understand all bullish arguments, and am very open to adopt them, but I have chosen to exercise caution for now based on the downtrend in effect and low volume of the bounce, and the ferocity of the 2-day drop of April 16, and 17
There has been improvement across the board when gold diggers are concerned.
This is a breadth chart of HUI
Nice bounce and positive divergences. Key measures are in neutral territory and at a downward trend line.
Again, I prefer to wait and see how gold stocks perform in coming days.
The yellow metal itself had a decent week as well
The lack of volume on the bounce is a bit disconcerting.
GLD is still in a mid-term downtrend, and is approaching an area of strong resistance. I have a bit of gold and silver (using CEF), but overall I decided to let this play for a few more days.
One can argue a bullish case here as well