• 9 hours Bitcoin Lives Up To Its Safe Haven Status In A Big Way
  • 13 hours 14 Million People Will Lose Unemployment Benefits On December 31st
  • 2 days Why 12 Million American Millionaires Isn’t Good News
  • 3 days Big Oil Is Paying The Price For Investing In Renewables
  • 4 days The Banking Industry’s $35 Billion Gravy Train Could Disappear
  • 5 days Did Amazon Just Democratize Prescription Drugs?
  • 7 days The Private Space Race Just Got Very Real
  • 8 days Short Sellers Are Willing Big In This Turbulent Market
  • 10 days SpaceX Gets Go-Ahead To Send Humans Into Space
  • 10 days Saudi Arabia Lost $27 Billion In Oil Crash
  • 11 days China’s Big Tech Takes A Hit As Regulators Crack Down
  • 12 days Black Friday Could Be Retailers’ Only Hope
  • 13 days Why You Should Not Dump Your Stay At Home Stocks Just Yet
  • 14 days The Real Reason Why Uber And Lyft Stocks Have Soared Nearly 50%
  • 16 days Bitcoin Heads Towards $16,000 And No One’s Cashing In
  • 17 days Elon Musk’s $250 Tesla Tequila Is Already Sold Out
  • 18 days Will The San Francisco Wealth Tax Spark An Exodus Of The Rich?
  • 19 days The Fin-Tech IPO Of The Century Just Got Crushed
  • 20 days UK Bookies Report Largest-Ever Political Bet Ahead Of Election Results
  • 21 days Better Safe Than Sorry: 5 Alternative Investment Plays
How The Ultra-Wealthy Are Using Art To Dodge Taxes

How The Ultra-Wealthy Are Using Art To Dodge Taxes

More freeports open around the…

What's Behind The Global EV Sales Slowdown?

What's Behind The Global EV Sales Slowdown?

An economic slowdown in many…

  1. Home
  2. Markets
  3. Other

Gold and GDX are Doing The Complete Opposite

The market is full of bloggers who write their own forecast. They'll tell you one thing, and then another. Some will call it early, some will call it late. Some call it late because they're afraid to call it period.

But, what you don't know is the trend. The trend dictates direction. Direction tells you where. Direction tells you everything.

The Gold market is in a BULL market. The long-term trend is up. The intermediate trend is up. The short term trend is down.

Name a point in time when levels of bullish sentiment were at extremes, and you have the majority of people calling for a top?

It just doesn't happen.

Take GDX for example. GDX has extended to marginal highs, but if you look closer, its individual counterparts are struggling. GDX is made up of 49 stocks, 21 of which have reached new highs. The other 28 have not.

Those numbers aren't terribly bad. They're also not great either. And if GDX goes higher, those numbers are subject to change. I know.

But, this ETF is cap weighted. And its top 10 holdings account for nearly 61%.

Only 4 out of the 10 stocks have reached new highs. 3 out of those 4 are ranked in the bottom half.

Can these numbers change? Sure. But if another stock, or group of stocks break to new highs it does not project a bullish outlook. It's called front running.

Front running is a trap. And a very costly one. Front running makes you think what isn't. Front running is also short lived.

The culprit will be the dollar.

From 2014-2015, the dollar rallied for 10 consecutive months. Today it suggests nothing short of a consolidation. Its intermediate trend is up, and still looks very bullish. It too will rise.

Monthly Chart:

US Dollar Futures Monthly Chart

The next few weeks should go something like this. GDX attempts to rally a wee bit higher. But, anything higher is only to form a top. Then comes the selling.

And the correction coming is not going to be pretty. It's not going to be short. It's going to last for several months, and run late into this year. It's also just around the corner.

GDX Weekly Chart:

GDX Weekly Chart

 

Back to homepage

Leave a comment

Leave a comment