From Sentimentrader comes the public optimism (OPTIX) reading. While we have noted daily HUI and GDX to be in pullback mode within the uptrends from March, this indicator – independent of all the noise going on this week – is contrary bullish for gold stocks.
The GDX OPTIX has been fairly reliable since indicating a good bottom in February and calling out interim highs and lows during the rally.
I believe I have presented enough reasons for caution on the broad rally and by extension, the gold miners, as a week packed with emotional energy gets underway. But we will also consider the other side of the coin, which is a sector that is already getting its sentiment situation squared away on the short-term.
At the very least, this implies to me that the greater rally is probably not over and that a buying opportunity will develop on this pullback. It may have already developed, but as noted, I am personally not going to get caught speculating (guessing) on may-haves this week. I have my positions, hedged roughly at about 60 to 70%. I am adding this contrary bullish development to my decision-making process going forward.
