Monday, November 27, 2017

Quick note on gold and miners

So normally, these past couple years, investors have vomited gold and gold miners in December, as part of the typical yearly loss capitalization and port rebalancing.

That alone is reason to think they'll do something different eventually. The market tends to go in the opposite direction to what everyone expects.

There also aren't that much in the way of losses in the gold miner market his year, unless everyone has bought at the tops. Most of the volume in GDX (easily 60-70%) has been in the $22.50-$23.50 range this year.

Also, GDX is threatening a crossover of the SMA(50) under the EMA(20). When that happens people will take it as a signal to dump. But the gold action this morning suggests that might be a fakeout: a pop above the SMA(50) (i.e. GDX=$23.10) may signal a failed crossover attempt, which is a good buy signal.

Frankly, selling has been decelerating since September (actually it's decelerated all year), and there's a nice intermediate bottom forming in the chart.

And at this second gold is up to $1296. $1300 is a nice round number where something interesting should happen.

So the GDX now looks very interesting to me.

There, I just jinxed the gold miners.

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