For all the wild swings the markets have been making, gold stock related ETFs and indices have been acting like they don’t care. Nothing in the last month or so has fired up investors to hit the “BUY” button. What does it take? The wedge you see will certainly tell us, as the HUI has to “Breakout” or ” Meltdown”. There is no middle ground as the only other option is for gold stocks to keep going sideways. The Gold/HUI ratio was at 8.2:1 this morning which is getting cheap but not an extreme just yet.
RING is a gold stock ETF and it looks much like the HUI does. Gold itself is fooling us because the same pattern in gold is facing up! The same wedge applies to RING which is trapped in the “Cone” of the wedge. I have no large database of Gold/Ring ratios but this morning the Gold/Ring Ratio is at 80.9:1. HUI and RING look like twins, but other ETFs are much lower. Some Canadian ETFs have had new lows a week or so ago. RING had about a 49% drop from its peak, while the HUI had dropped about 52%.
I would love to go long but there are still too many bulls around for my liking. Next time I will post some of the worst gold stock ETFs that are near to hitting new all-time record lows.
Most analysts ignore the VIX, and investors ignore the VIX even more. When the VIX soars, you know that the stock market will plunge. In January 2018 the VIX bottomed trapping all the VIX short players. This caused the spike up to the 50 price level which is an illusion. When I switch to line mode the 37 price level is the max. For all of 2018, the VIX has been in a bull market, and chances are good we will never see a new record low for many years. Stock euphoria and complacency would have to return in order for another huge leg up to happen in stock markets.
It’s next to impossible to be super bearish with the VIX as without fanfare the VIX has created the Golden Cross with this daily chart. The VIX is built with SP500 options and is the main reason why the VIX is this choppy. SP500 investors are walking into a bull trap while VIX bears are in a bear trap. The VIX would have to drop for weeks (50 days ?)before another VIX Death Cross can happen.
Right now the VIX is sitting on the 200-day MA and it created a couple of gaps on the way down. Those gaps will get filled on the way up as fear will return for investors? The Fed created a nice stock market bull trap and the VIX is the big indicator where we can watch it happen. Switch this chart to weekly settings and you will see that the Golden Cross just happened in November. These are very bullish long-term VIX indicators and most of the world ignores them.
It may take the rest of the week, but some more downside can happen, after which I expect a full reversal and a new record high for the VIX.
Stocks soared in a wave 2 in Minor degree yesterday, as the VIX crashed in wave 2 in Minor degree. Once these set of 5 waves start to come to an end then chances are very good, I will turn into a stock bull as we would be at my VIX “A” wave peak in Primary degree. “A” wave bottoms in stocks are Elliott wave “buy” signals, escpecially if they are Primary degree “A” waves.