Tag Archives: GDX

[In spite of what] the typical Wall Street cheerleaders, I mean strategists, are predicting, we see the equity market ever more closer to its cyclical top, miners about to retest a major bottom and hard assets with a new catalyst. [This article analyzes 9 pieces of information, complete with charts, that show what is actually going on in the marketplace at this point in time and what the short-term future holds.] Words: 930; Charts: 8

As we begin 2013, there has been an important shift in regards to precious metals...the decoupling that has taken place between the equity market and the precious metals complex...[which] began nearly 17 months ago (decouplings of three or six months are not significant). Since the Euro crisis in summer 2011, the equity market has rallied nearly 30% and reached a five-year high, but gold stocks are down by more than 30%...[and, as such,] precious metals cannot begin an impulsive sustained bull move if the equity market continues to move higher. The equity market has to struggle with resistance and begin a mild cyclical bear move. While over the near-term precious metals can confirm a higher low, the 2013 success of the sector depends on the struggles of conventional stocks. [This article explains why that is the case and uses several charts to illustrate the point.] Words: 899

There are countless articles available for free suggesting what to expect short- and long-term in the markets but what are those analysts who charge a fee for their insights and recommendations saying these days? Same old, same old or unique and actionable? One such subscription market timing service has pulled back the veil to give us a peek at what could well be unfolding. Words: 906; Charts: 8 links

The GDX has declined 17% during the past 3 months (3.5% in the past month) and has continued to decline over the past week. It has smashed through the 50-day moving average and the 200-day moving average. Nevertheless, given all the enthusiasm for the future price of gold (and silver) might this well be the time to hold one's nose and buy in before it makes its expected move that would turn the present stench into that of perfume?

The best way to look at miners, in relation to gold, is to look at the relative strength of each which is most clearly illustrated through ratio analysis. Whether you are a fundamental or technical analyst, both schools of thought support the notion of investing in sectors that exhibit positive relative strength. For those unfamiliar, the idea is that relative strength tends to persist over time and that it is often best to invest in securities that exhibit positive relative strength. [So what does relative strength analysis suggest is the appropriate course of action these days? Let's take a look.] Words: 805

George Soros’ hedge fund, Soros Fund Management LLC, states in its Nov. 14th 13-f filing that, among other major moves related to gold, the fund has added a $9 million call option position on the GDX which means that management of the fund believes that gold mining equities are extremely undervalued on a short term basis and that major money to be made over the next 6-12 months, via a sharp move higher in the GDX. Words: 405

Hedge fund manager Hugh Hendry has stated, "There is no rationale for owning gold mining equities. It is as close as you get to insanity. The risk premium goes up when the gold price goes up." Indeed, the notion that adding gold and other commodities to one's portfolio produces a higher expected return with lower risk failure has failed of late and can be illustrated through the following charts. Words: 808

You have probably read in multiple articles that mining stocks offer leverage to the movement of the underlying metal. This hasn’t been the case over the past several years, however, which has created some confusion in the precious metals investment community. While the gold price has more than doubled (+110%) in the past five years, the AMEX Gold Bugs Index (HUI) is up only 15% so why do people keep saying that mining stocks offer leverage? Well, because they do during certain periods of the bull market. [Let me explain the situation more fully and exactly where we are in the current bull market.] Words: 677

Everyone knows that gold and silver have been on a tear over the past decade, outpacing gains in almost every other sector. Mining stocks have been hit or miss, offering incredible leverage during certain periods and under-performing the metals during other periods. However, one type of precious metals equity has been significantly outperforming both the metals and mining shares...[and that] is gold and silver streaming companies. Words: 2500

If you aren't already in, this coming Monday or Tuesday (Nov. 5-6th) should represent an exceptional buying opportunity as gold moves into its final intermediate cycle bottom. Now that the 38% retracement has been breached I would look for a final exhaustion move to test the 50% level early next week as we move into the elections. Words: 284