Thursday, November 21, 2013

GDXJ, GLD, and the relation betwixt the twain: why the carnage must continue

Three charts:

GLD still vomits, but hasn't hit a lower low yet. I dunno if there's enough weak-handed Wall Street Whitey gold left to puke this down, but then again Indian demand is being artificially constricted this time.

And yet GDXJ is hitting a lower low.

I guess when you look at all the GDXJ constituents, there are still enough of them (PVG? CSI? GCM? whoever, I'm not looking it up) puking their guts out that the overall index must continue collapsing, eh?

Now let's divide one by the other:

So this is GDXJ divided by GLD, and because it looks like GDXJ's chart, with a break of critical support and momentum heading into a lower low, I guess that means GDXJ generally provides positive day-to-day leverage to gold in the direction gold is moving.

But there's a negative bias to the chart, which means the long-term trend of GDXJ is still downward. So I guess people are still puking GDXJ more strongly than GLD, not accumulating; and that means the carnage must continue.

1 comment:

  1. For tax loss reasons you have to lock in your loss now and for CRA to recognize that loss you can not repurchase the security for 30 days.. That will pretty much bring us to year end before that money comes back into this play, if it comes back at all..