So, as the title states, the junior minors, as measured by GDXJ, staged a nearly 10% intraday reversal from low to high on volume more than 3x average. In the process, it posted an outside reversal day relative to Thursday's trading. Investopedia.com explains an outside reversal day as "a price chart pattern in which a security's high and low prices for the day exceed those of the previous trading session. The outside reversal pattern is called by candlestick chartists and analysts a "bearish engulfing" pattern if the second bar is a down candlestick, and a "bullish engulfing" pattern if the second bar is an up candlestick."
Since GDXJ reversed higher, we obviously have a "bullish engulfing" pattern. These patterns often mark reversal points, or trend changes. Since we're on a daily chart, any trend change would be short term in nature, at least until the weekly or monthly charts start turning around too.
The elephant in the technical analysis room, however, is the action from Monday, July 20th when GDXJ dropped 9.5% on 4x its average volume. So here we are, four days later, putting in a huge outside reversal day, on equally huge volume and yet it only recovered back to levels from Tuesday. Put differently, there were over 111 million shares traded last week with a total float of 60.7 million shares. The entire floating supply of stock was traded nearly two times over in the span of five days!
The bulls and bears are having an epic battle at these levels which, coincidentally, is the lowest GDXJ has ever been. Given that minors are the lowest they've ever been relative to gold, coupled with the fact that gold is trading at or below the cost of production, one would think that the risk of further sustained downside would be limited. But remember, the market can remain irrational far longer than you can remain solvent. Trade accordingly.