Gold Stocks, GDX Review

 

gdx-dec-5-2016

 

My patience has started to run a bit thin, as gold and gold stocks seemed to keep declining.  This is also the same time that gold stocks can reverse and roar.  I would be happy if this all turned the corner soon, but I can wish it until pigs start to fly,  if gold stocks are still not ready to start the next leg up.  The Gold/Gdx ration is still very reasonable at 55:1  which has been about the average since the beginning of November.  When GDX gets closer to a 30:1 ratio then we are looking at very expensive gold stocks. Many other ratios would also have to calculate out closer to the extremes, as I don’t base anything on strictly one ETF. 

From my perspective, there should be more upside left to come. So many people are bearish on gold stocks, so when this starts to turn, then all the bears will turn into gold stock bulls. This can put more power behind a move, and is what I look for most of the time. 

I’m trying the wave count containing an expanded pattern, which would produce a more even looking zigzag once the “C” wave starts to complete.  Some readers have asked which wave counts are the best ones to trade? In the last few years I have covered many, if not all of the wave positions which can produce extremely wild moves and a “C” wave bull market is one of them.  Even a Minor degree move can surprise us, but the chance of staying in that type of trade is next to zero. Sooner or later we get scared out of a move, stops get hit, or we take profits far too early. 

The same type of moves up, also happens on the way down. This is when the traders that know how to speculate short, benefit.