GDM is another gold stock index and I look at it from time to time, as an alternate source of data besides the HUI. Gold stocks slumped a bit more this morning, and from my perspective the bearish rally is breaking down. It peaked just about two years ago, and is heading down to a new record low by this fall. Right now the angle looks harmless, but these moves can drop in a vertical move, that can also produce a huge gap.
I can’t give a more simple or direct description in what a bear market rally is, “any bear market rally must retrace all and back to below the point of orgin.” When I see wave analysts turn a bear market rally into a bull market, then I get choked how much they will cause the unsuspecting investor to lose money. This is not the time to invest when gold hit a 30 mania peak in 2011. There is always a time when to invest in gold stocks and another time when to trade them. Trading started back in 2011 and will continue until the 2021 time period or when solar cycle #25 starts to rise from the northern part of the sun.
The sun can breakup a bearsih mood pretty quick once it gets going. XAU is also another gold stock related index which I check as well.