Market Timing Tip: There’s Gold in the Gold Miner vs. Gold Chart

There is true gold to be found in the chart below.  If you look at the market timing rally in gold stocks last summer that began on August 6th, you’ll see that the miners (GDX) ran ahead of the gold ETF (GLD).  This is an important observation for this mornings trade, as I’m facing along with you the swoon in gold and gold miners since the Fed announcement.  It occurred in the post-NY market overseas.  Silver also took a dive.

So what’s the gold in the chart below?  The gold comes from seeing that the gold miners are not down as much as they normally would be when gold dives one percent.  Normally the reaction of the miners an easy double or more of the gold move.  But the miners are down only 1.57% in the premarket and are sitting up above the 5 day moving average, which is 46.80 this morning and the trade is at 46.85.  Admittedly the number of shares is low, so we’ll get the real verdict at 9:30 am.


There’s gold in this chart (see text).

CONCLUSION: I believe at this time that the fact that the gold miners are not sitting back down at the 12-05-2012 low with gold and silver in the premarket is POSITIVE for both gold and silver.  We’ll get the answer today! (UPDATE @ 9:23 am – GDX slipped a bit more just after I published this, but is still ahead of GLD on the chart.  GLD slipped even more though to -1.22% from -0.99%.)

Standard Disclaimer: It’s your money and your decision as to how to invest it.

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This entry was posted in gold, gold etf, gold stocks, Market timing, mining stocks and tagged , , , , . Bookmark the permalink.

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