GDX has rebounded from the downside gap fill as some combination of Fed rate cut obsession and BOJ policy statements serve to spark the recovery across asset markets. So far we’re on plan, although I thought there might be more of a grind in establishing a low (broad markets, including gold stocks). That still may be the case, but for the moment gold stocks and the broader indexes are ‘V’ bouncing.
As for GDX, unlike HUI it was below the daily SMA 50 until this morning, as it pops to fill a small gap. We’d obviously want to see it hold the SMA 50 in order to firm up a ‘correction over’ view. Increased up-volume would help as well.
Unlike GDX, HUI (daily) had already taken its SMA 50 after plunging below it on the negative hype day and recovering.
Both items continue to work on their young uptrends and while there can be some additional grinding and conceivably a test of this week’s lows, the correction does not damage the technical situation (other than HUI marginally losing the trend line breakout we’ve reviewed in NFTRH by weekly chart). As a reminder, I am not overly concerned about trend lines.
As a side note, the HUI/Gold ratio is also intact to the intermediate-term rally theme.
While the macro-economic fundamentals continue to come into place for the gold stock sector, it should also be noted that the miners continue to generally be in tow with the broad markets. So they are not yet “special”, as I expect they will be in Q4 or by early 2025.
Just a quick snapshot by daily charts for you.
Great timing that you moved before all this unfolded, Gary! Nobody, at least on CNBC, seems to think this has any legs. The VIX is the talk of the town. The VIX has topped, so stocks have bottomed; seems the prevailing idea out there. The non-technical question is of course: did any institution(s) get really hurt the last few days? The answer usually takes a week or two. Bart
Well Bart, one thing I know is normal is that the markets were not just going to recover back to happy days are here again without some grind. I am going to keep the “summer correction” plan favored but as always I’ll let the market and its tolerances/parameters determine.
Oh and as for the timing, I told my wife “we are selling ASAP” back in February. Luckily we had already done some prep on the house but it was 5 months of pain getting it all done. Shear luck getting it sold before the economic jitters really ramped up. On the bigger picture I in essence traded my home, hoping to catch the bubble top. Best part is that we love our new apartment and the city environment it sits in.