Friday, December 12, 2014

Well there's your tax loss selling

Here, let me show you some charts, this time with some scribbles written on them in crayon so you can actually follow what I'm saying.


The uptrend remains. Gold is above its SMA(50). You'd kinda like to see this resolve to the upside. I think my assumption is that you shouldn't see big sells hammering gold, because the people who would put those sells on have realized gold is now going up ex-USD, and the big sells don't help the kind of trade they should be making now.

So gold miners should also be moving up above the SMA(50), right? I mean, that's my thesis, right?


Nope. Miners still look weak. GLD is 2% above its SMA(50), but the juniors are still about 15% below their SMA(50). No leverage to gold. This divergence only began in late November, and has grown since then.

And I realized last night or this morning (it's all a blur nowadays) that this is probably caused by the tax-loss selling everybody was waiting for.

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