Existing home sales fell. Jobless claims increased. Fed’s Williams “more concerned about lower inflation than higher”. All that stuff is positive, not negative, for the gold stock sector. Gold stocks needed a pullback and here it is.
Moving on, the Silver/Gold ratio it getting dinged – as it should – amid the economic angst and supposed lack of inflation. And the TSX-V is in line with the Silver/Gold ratio as would be expected. The issue I have is certainly not with the news of the day (a Fed official ruminating about low inflation or economic stress). The concern is that CNDX has come a million miles and hit our target yesterday. It’s still downtrend and if it is going to remain so, this is a logical termination area. If CDNX halts, so too likely would the various global reflation trades eventually halt.
Right now, it’s doing what it of course would do at the SMA 200. It is halting. It does not mean the rally will end, but it does mean that by definition we are at a caution point until resolved in a continued up move or a reversal.