NFTRH+; GDX & GDXJ did this, this morning…

Filled the gaps from last week, that is.

That is a good thing. As such I covered my hedge (DUST), but also sold a couple miners (HL & WDOFF, ref. thoughts on these in NFTRH 734).

But we are also considering the possibility of a deflationary impulse strong enough to take down stocks, commodities and possibly all those inflation bugs infesting gold stocks. Whether that time is now or in H1, 2023 (favored) a deflation scare gets people acting emotionally and to begin with most gold bugs don’t even know the right reasons to buy/hold gold stocks (in my not so humble opinion).

So as ironic as it sounds, gold stocks are often sold down during acute deflationary phases when their fundamentals are actually screaming higher. Look no further than Q4, 2008 as a violently glorious example.

Bottom Line: Those lower gaps could simply be breakaway gaps (that will one day be looked back upon as having ushered in a new [up] trend) with no need to fill any time soon. Or they could get filled if severe broad market stress ensues. I can’t control the markets but I sure can give you views of how I am seeing things. For now, it’s a minor pullback to fill last week’s excitable gaps. If GDX takes out the orange EMA 10 and the green EMA 20 then it starts getting less comfortable in the short-term.

Bottomest Line: I remain bullish on the sector for 2023 and a deflationary market liquidation – if that comes about – would only increase my bullishness regardless of the degree to which the miners may get caught up in it.

gdx and gdxj gold stock etfs