Gold Stocks, GOEX ETF Crash And Gap Review



When I saw this GOEX gold stock chart, I noticed a big drop and add insult to injury, GOEX open up a huge gap on the way down.  Obviously the major hate gold stocks of any kind. This is a prime example of emotional investors selling out in a panic. If this is not a strong bottom, then I don’t know what will. 

As soon as markets point straight down, then this is as fast as a market can decline.  It sure can’t be maintained like this and the reversal may have already started.  We came to near record lows again, as the Gold/Goex ratio hit about 57:1. This happened quickly  as on December 3rd this ratio was about 38:1. 

The emotional traders or investors have just put gold stocks into a fire sale for the last few days.   Who do you think the buyers are on a fire sale day?   The contrarians are, and you will not see it in the volume numbers as contrarians buy with a set of,  GTC Ladder Of Orders. They never take their entire positions at once, and they know when catching a falling knife, that they will be seeing some red for some time. 

Another  bullish phase could be on us, as the majority,  are running  for the hills as far away from gold stocks as they can. How long will it take for the gold bears to wake up and smell the BS. (Bullish sentiment), before they jump back in?  By the time GOEX hits about $34 the bearish sellers now, would have left 60% gains on the table.

Any “C” wave bullish phase, can have a very dramatic top when they blow, so it wouldn’t surprise me,  that gold stock ETFs will eventually point straight up again.   Of course, if that does happen, everybody on the planet will be bullish on gold yet again.  

If  this 5 month bear market was just a correction, then new record highs above the $46 price level, should happen.  At $46 we would get close to a double from present prices, with GOEX. 

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GOEX, Global X Gold Explorers (ETF) Review




GOEX is another gold related asset that helps to confirm other wave counts as well.  By the looks of it, it’s heading south, and it may have some more downside left, but GOEX has reached the bottom of my two parallel lines, and I think it is getting close to rally again.

It all depends on our believe, if we think a return of the bear market is actually in progress. One way to tell, is to see how high the counter rally will go. Just by waiting to see if it breaks the top trend line, you would be leaving about a 24% gain on the table, for one specific trade. When we wait until a new upside breakout occurs, then you have left about a 63% gain on the table. Of course it only gets worse, if gold stocks are in a bigger bull market than what many realize.  

From the 2016 bottom, and about 7 months later a gain of about 300% was also left on the table. Don’t worry the contrarians have already scooped up those gains, leaving the late comers and trend chasers a few scraps of profit to make them feel good.  

This happens over and over, and the contrarians know this. The main reason they were buying low during the 2015 decline, is so they have the time to accumulate large positions. They do this with a specialized ladder of GTC  (Good Until Canceled) orders. 

This bullish phase could be a big ((B)) wave in Primary degree, and if that is true all corrections will produce “ABC” type crashes or declines.  It is when the rallies start to invert, that we will come to an end to this bullish phase. 

I calculated a few Gold/Goex ratios, and at present we are sitting at about 42:1. I don’t have a very good record, on the extremes, but I have a few that I can work with.

The 2011 peak extreme was a little less than 13:1 and the extreme low in 2016 was a bit over 73:1.  Our present, 42:1 ratio has to compress in the years ahead, which will start to make gold stocks expensive again. Markets move from one extreme, by loving gold stocks at the peaks, and then back to another opposite extreme, to hating gold stocks at major bottoms. So if you know nothing about the EWP, then the gold/stock ratio is one of the very best “Objective” indicators to use.      

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