Who could predict the timing? Well, I mean other than them.
I certainly didn’t, in releasing my hedge. Regardless, we are back to downside pullback (buy/op) management in gold stocks. Let’s use our usual daily chart of GDX.
It looks to open around 47.80 and that does not even come close to the preferred level at short-term support and the rising 50 day average. A deeper correction would test the 200 day average, also rising.
While I think that gold stocks will eventually gather a bid if the silver-led commodity trade actually becomes a thing, they could under-perform. This is a ‘quant’ back to the ‘inflation trade’ phase that followed the 2001-2004 analog phase we’ve been working to.
Bottom line here: the correction is healthy. Indeed, GDX could need more of it. I would not jump today as a “buy opportunity”. I would have patience in evaluating the macro phase.
