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.