Friday, February 6, 2015

Now, before y'all go buying junior miners....

Now, before y'all go buying junior miners, just remember that gold was in a highly correlated trend with a bunch of other things.

Which means you don't want the other trends to stop.

So check out these charts:

 The long treasury trend seems to be over.

Short oil seems to be over, or at least it's become ambivalent. Doesn't matter what the fundamentals say, what matters is what the chart is doing.

Junk seems to be moving back up now.

USD doesn't look to be stopping just yet, but this would be the next shoe to drop, and remember that gold has been positively correlated to USD for a couple months now.

$VIX would also be the next thing to move, out of its elevated sideways channel and back into a normal slow downtrend.

With all that in mind:

Nobody in the world has been making money on the long gold trade for the past 2 weeks, so unless that GLD:UDN chart reverses pretty darn quick, you're not going to want to be in miners for a while.

I think the only question is whether you see a brutal selloff in gold miners, or whether you only see a slow descent with obvious accumulation.

There's always the june gold pop to play, guys. Til then, maybe waiting to see how low stocks can go before buying is a good way to mitigate possible downside risk?

I mean, even the lamestream media didn't go long gold in January. Why do you think Whitey will want to stay long the miners?

Personally I still got a bit of BTO, and a few DNA warrants left, but I've hedged that with twice as much money in and am laughing.

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