For the first time since the January bear trap reversal, precious metals mining stock ETF, GDX, is showing weakness. After forming bearish divergence the index recently broke its (dotted green) uptrend line and last week created its first lower low. While not a swing sell signal, these warnings cannot be ignored and should act as a wake up call to the bulls.

If I read end of week action correctly it does not look as if this correction has run its course. If not, the first line of support below is the $24.5 level and beyond that if we get a much bigger flush, $22 seems like a very important level as both the 50% Fibonacci extension from the January bottom and the 200 day moving average reside in that area. Regardless of where price eventually finds support, our bullish outlook will only continue if, on the next bounce higher, we go on to make a higher high. If not, that will be signal to take profits in at least half the position and look for further directional clues.