Loading ...Gold Miner Baby Bull 2 point Oh ?
In late December 2015 Gold mining stocks exploded higher. The rally ended abruptly in August 2016. Disappointed God Bugs called the break out the Baby Bull because after all, it didn’t follow through with a genuine full grown bull market move. A second rally ended abruptly in August 2020.
These charts compare the initial decline in the Baby Bull with the decline, so far, in today’s market. The implications, if any, for the near term direction of gold mining stocks are open to debate. The top rails and the dotted black trend line are parallel.
GDX – WEEKLY
GDXJ – WEEKLY
$GDM – WEEKLY
$HUI – WEEKLY
I am expecting rangebound action in the miners until the next FOMC meeting in mid-March. Basically, I am expecting price to stay between the December 15 low and the January 20 high until after the March FOMC meeting. I am basing this mostly off of Ichimoku cloud indicators on the daily chart. The next weak spot in the daily cloud coincides exactly with the date of the March FOMC meeting.
Of course, no technical indicator is 100%, but IMO they can give you a good handle on probabilities.
The metals actually look much better than the miners, technically. So I will concede that it’s possible the miners could play catch up. But I never like it when the miners diverge so dramatically from the metals. Is this a repeat of late 2015. Possibly. But right now the probabilities are against it IMO.
In your camp Naut … have GLL (short gold) on deck for a (multi week to multi month) swing move. DUST and JDST are also almost there.
I can’t forecast (I leave that to the EW gang), but I do make a point of following my back tested trading rules.
Nice Charts Foxxy