The XME/GDX relationship has held true for decades, and after completing a substantial top and plunging hard, it has recovered almost back to the base of its top.
On That Metals Pair Trade
Slope of Hope Blog Posts
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Gold Stock Correction on Cue
Bull Market Far from Over
The gold stock correction was needed, is healthy and will provide opportunity
Let’s not belabor the point; the gold stock correction came as implied – and frankly, as needed – with several indicators of excessive counter-cyclical sentiment driving broad stocks down and gold stocks up.
That’s the bad news in the short-term (good news, if prepared). Beyond the short-term, the better news is that we are very likely seeing an upward adjustment in over-bearish broad sentiment as the stock market continues upward (also as anticipated).
(more…)Silver Fades the SMA 50
Silver Fades the SMA 50, Silver/Gold Ratio Still in Dive Bomb Mode
The Silver/Gold ratio remains extremely depressed as nominal silver slips its 50 day moving average
No reversal yet in the Silver/Gold ratio (ref. A Reversal in the Silver/Gold Ratio Would Be the Trigger). In fact, quite the contrary as the ratio looks to start its 5th day fading after a spike last week.
That in itself is not a big deal. It’s a normal consolidation of the spike. But the nominal silver price, which had been conspicuously strong above its SMA 50 (blue) despite the correction in gold and the miners, is slipping said SMA 50 this morning, pre-US open.
If that is an indication of things to come, the sector correction should continue and other areas in commodities/resources could come under renewed pressure.
(more…)Peak Silver
I think it’s finally safe to say silver’s rally is done for the foreseeable future, with a stop-loss at 30.65 on SLV:
More on Metals
Compared to the past three weeks, today feels like a crashing bore. Well, “crashing” probably isn’t the right word for a market that has been going straight up since the opening bell, predicated on the fact that Trump is supposed to………speak! So, I’m sure we’re all quite excited to hear more truthiness.
In the meanwhile, I wanted to share some charts of XME, the metals/mining ETF which I think has a very appealing risk/reward ratio as a short position.
Here it is with the RSI, which is quite elevated:
