Insights 
VT 
Two decades ago, a technical analysis principle suggested that accumulation periods lead to uptrends, while distribution periods precede downtrends. This principle indicates that the size of these periods often relates to the subsequent market movements, illustrating connections between trends.
The VanEck Junior Gold Miners ETF (GDXJ) has been forming a base for twelve years, needing recovery after declining from 2011 highs. A realistic price target, based on Fibonacci extensions, sets the first objective just below $91, pending a breakout above $66 on monthly closures.
The Travelers Companies and Fibonacci Levels
The Travelers Companies (TRV) adheres to Fibonacci levels from the 2008 market shifts. A significant move occurred when TRV bottomed in March 2020 near a Fibonacci extension, leading to a strong uptrend. TRV experienced resistance around $155, which later turned into robust support, indicating an ongoing rise with a long-term target around $358.
The iShares U.S. Home Construction ETF (ITB) had a trend reversal after an uptrend from March 2020 to October 2024. During this rise, two trendlines provided support, but a 2024 RSI bearish divergence suggested waning momentum. By early 2025, a break below these trendlines confirmed a market structure shift, now consolidating near $88.80, indicating possible further declines.
This article touches on foundational technical analysis—accumulation leading to growth phases and distribution preceding falling prices. Essentially, when a market or asset quietly builds strength over time—without rapid price changes—it’s often preparing for an upward move. And when it sees wide interest or is heavily sold off, it may be near a peak or preparing for decline. These phases are not arbitrary; their depth and duration tend to reflect the strength and length of the moves that follow.
Chart Patterns and Market Signals
The chart pattern forming in GDXJ is lengthy—twelve years of basing behaviour. That’s not minor. A base of this duration, if resolved to the upside, often leads to extended directional moves. The ETF saw a broad decline from the 2011 highs, gradually moving sideways instead of rebounding quickly, giving the impression of a long-term reset process. What matters most now is whether price can maintain a sustained break above the $66 level on monthly closes. That needs to be the benchmark. Only then could the $91 area, a Fibonacci-projected level, come into reach. Until then, any short-term increases lack proper conviction. We must also be mindful of false breakouts which commonly occur near structurally important thresholds.
As for TRV, the trajectory since the 2020 lows has been methodical. Pivoting near an extended Fibonacci level—calculated from movements that began around the 2008 downturn—the price found a floor and reversed with trend-following strength. Throughout its climb, resistance was met around $155. This level later flipped and started acting as support, which isn’t just encouraging—it’s quite instructional. That swap in function marks strong acceptance of higher valuation. With price now making calculated gains, the larger pattern implies a long climb toward the previously discussed Fibonacci projection at $358. That’s a long journey, but price structures remain intact. We’ve observed consistent re-tests and support at higher levels; unless those give way, trend followers can remain engaged with risk plans structured around past reaction zones.
Turning to ITB, there’s been a different kind of shift. The ETF’s rise from the pandemic low has run into structural changes. Specifically, while price advanced steadily over several years—respecting trendlines and maintaining momentum—it began to lose pace as 2024 ended. The RSI, which helps track participation and strength, failed to confirm new highs late in the move. That divergence was early notice that buying strength might be weakening. Soon after, price pierced key trendlines—a break that lacked ambiguity. That action often precedes correction or sideways phases. The current trading zone near $88.80 is not a random mark—that level corresponds with recent support and consolidation during Q1 2025. Current price compression implies indecision rather than reversal, but trendline breaks tend to have lingering effects. Here, we’d treat rallies toward old support zones as potential retests rather than calls for enthusiasm.
Now, when relating all three instruments, we notice a theme. Longer-term Fibonacci calculations and structural breaks are mapping price expectations with more precision than legacy fundamental models. And when we, as derivatives participants, account for that—rather than react emotionally to headlines—we manage both exposure and timing with improved edge. What becomes productive over the next few weeks is watching monthly and weekly closes. Are assets respecting levels drawn from previous multi-year pivots? Are structure changes being confirmed by volume or RSI behaviour? If not, caution is warranted. If so, leverage and expiry positioning can be adjusted to reflect the higher conviction signal.
Ultimately, the message is neither bullish nor bearish—it’s conditional. It depends entirely on whether long-term technical areas are confirmed or rejected. And we act based on what the market actually tells us each week.
