Gold miners definitely are the forgotten sector of the rally from the October 2011 low in the S&P 500 at 1074.77 to this week's high at 1419.15. This rally amounts to a 32% climb, compared to the performance of the Market Vectors Gold Miners ETF (GDX), which is down 2.7% since its October 2011 low.
However, there just might be some cause for optimism, that the Street might feel compelled to rotate into the miners from other frothy sectors. Let's notice that the weakness off of the September 2011 peak has taken the form of a declining wedge formation, which in and of itself represents a correction that is nearing completion, rather than a major top ahead of a bear market.
Furthermore, Thursday's minor upside reversal came after the GDX hit a new multi-month low at 48.05, which held just above, and bounced off of, important multi-year support at 47.50. Thurday's low was not confirmed by daily momentum, or by MACD, which is climbing towards a near-term buy signal.