Let's start with Gold Miners...
Back on April 13th of this year, I said gold miners were headed down. They were weak and getting weaker at the time, but very oversold already. My target on GDX was $17.50 with a test of $15.48 possible. Now it looks like we won't quite get there. I think we hit $30.10 before we hit new lows (vs. $22.21).
Here's why:
- BPGDM% is at 13.79%, the highest since Feb 2013. (See stockcharts.com for more info.)
- For the first time in many months, gold and silver stocks are showing up in my weekly screen of strongly bullish stocks. (AG first, and now AUQ and NGD). I expect more to follow.
- We closed above the weekly Chandelier Exit Line for the first time in over 6+ months.
- Everyone HATES gold - especially the experts on TV. They'd rather own cows than gold. Cows! I've got nothing against cows, but gold is easier to maintain. Yes, I know it doesn't pay a dividend and you can't eat it. Get over it. At the very least, it's just another investment class that's gotten pummeled just like tech stocks, financials, real estate, etc. These things go in cycles. Everybody is way too bearish at the bottom and everybody way too bullish at the top.
I'm not calling a bull market or a return to the old highs, but I do expect GDX gains to outpace SPX gains from here until year's end. And if I'm wrong, I'll get stopped. In terms of specific, the 3 that I mentioned before as well as your favorite gold/silver ETFs are good places to look for entries.
Here's a chart...
For more charts and to read a disclaimer, please see my public chart list on stockcharts.com....
