Gold Stocks GDX Review: Trapping the Gold Bears!

 

gdx-nov-10-2016

 

This gold stock related ETF follows the HUI fairly well.  We have a bearish decline that is still ongoing, but it should find a bottom eventually.  Sure, we can make good guesses as to how far it may go, but if GDX still has to finish a 5th wave then it could fall below $22. 

For the month of November the Gold/Gdx ratio has been about the 54:1 range which is still rather normal.  When this ratio becomes insane like a 30:1 ratio then we know the gold stock bull market gig is finished. 

The 2016 low was a major low by any stretch of the imagination and I believe we are in a Primary degree “B” wave bull market. As I mentioned before, those that are wondering what a Donald  Trump presidency may bring, should watch the gold market.  All the contrarians have been in gold stocks for some time already, and it was not in anticipation of a Trump, win. It was the shear fact that gold stocks were oversold by an extreme amount, why contrarians bought gold related assets. There is the odd chance that a diagonal first wave is in but that needs to be confirmed. It may take until the end of November for this bearish decline to fully play out. 

The fear of losing money, trying to catch a falling knife, is not what the majority of traders will ever do, as it is a very small percentage that really understand contrarian thinking.  

It is impossible to learn and practice any type of true contrarian thinking overnight, and if you really pour the coals to it, it may take you 4 years or more to do. The EWP will take you a minimum of 4 years to gasp, and that is only if you apply University Degree studying habits.  

 I just visited my friend yesterday and he worked very hard for the last 6 years, to go from running with the gold crowd to buying from the bearish gold crowd, and I’m sure he will never turn back as he is having a very successful year