Stocks Bull, Miners Bear and the Ritual is On

I can almost feel it by anecdotal evidence. At least some bugs are going through the ritual again. Giving up the ship. Throwing in the towel.

This after being the sector that succeeded in Q4 while the stock market imploded. Earlier in the week we reviewed over bearish sentiment in the senior and junior gold miners in an update. Well, today sees that sentiment even more bearish.

Why, just look at who occupies prime contrarian real estate on this graph from Sentimentrader.

That is good because while HUI has lost the SMA 50 (in poetic harmony with SPX taking out its SMA 50) nothing really has changed. As I’ve been harping about in weekly reports, the HUI/Gold ratio had remained below its down trending SMA 200 and so too did the Silver/Gold ratio. Those were two important indicators to turn, and as yet they haven’t been turned.

But nothing has really changed (yet anyway) either for the stock market or the gold sector with respect to post September trends. The running of the gold bugs is not a bad sign. It never was time for a full bull stance. But it could still be upcoming, depending on what goes on in the cyclical world in the next few weeks, or even days.

I have not been able to pound a table on the miners in NFTRH as some might like, but I have noted that fundamentally the sector is in line if cyclical markets stay out of line. Technically as well, with the agonizing grind of an uptrend in recent months, there’s no table pounding. Just work.

It never was time for an all-in attitude and hence, the weak hand that can give a holder. If cyclical stocks play ball I am looking forward to buying gold stocks on this pullback. If cyclical stocks re-bull for real (it’s not yet nearly real) then the miners go back under ground.

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