I have fun putting up the tired looking Huey Lewis picture (I couldn’t stand that music) and am always happy to poke the gold perma pom poms simply because of how damaging they can be to the uninitiated. But lately, a smart NFTRH subscriber has been describing just how much negativity he’s receiving out there in the financial social media sphere for his currently bullish view of the gold sector.
Personally, as far as the sector goes, it is nowhere because it has not climbed above the milestones we need to see in order to firmly call a new bull phase. But I am also aware that items large and small like FNV, RGLD, KL.TO (I own it) and SBB.TO are out performing greatly. Why, one that I hold, WDO.TO has actually been in an uninterrupted bull market since 2013.
So there is bullish divergence in play and there are legions of bearish people, from regular traders to many of the luminaries you see constantly micro managing gold sector analysis at the gold websites. When these people are over bearish, it’s not at all a bad thing. I’ve said that for the 13 years I’ve been publicly writing and am not changing that tune now.
Anyway, we have our short-term parameters for sure. But in NFTRH we have also had this monthly chart for ongoing frame of reference. Among the stories it tells is that the Bollinger mid-point was a bear market ball and chain (red arrows) and on the big correction down from the 2016 bounce it has acted as support, including this month, which just happens to end today (duh… ). So it looks like Huey may get a monthly close above the parameter. [now watch the thing tank into the close].
Now, the stock market has not cracked and that may be the biggest holdout to a sustainable bull view, with gold vs. commodities already bullish. So my view is pretty much unchanged. But I’d be careful of jumping in a bearish boat that apparently has a lot of people huddling on the port side. FWIW, I am still short GDX but very tentatively so and only to oversee a slow, painfully slow… buying process.
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