GDX Gold Stock, ETF Review

 

 

So far gold stocks have suffered the same fate as gold, as it seems we are in a mini crash at this point. More downside may still happen, but I sure do not want to see a complete retracement of the February bullish move. If it drops to a 60% retracement that would be just fine, as that would still produce a higher low which is the conventional description for a bull market.

If the wave 1 has already happened then we should get a far bigger move than what I have at present.  Even though both asset classes are crashing the Gold/Gdx ratio, which sits at 56:1 right now shows that gold stocks are getting cheaper when we use gold as money. I always use the futures gold cash price so I get more consistent readings. The gold price from the Kitco site will work just as well.  

A “D” wave bull market, could be real and even would match my old wave count.  Eventually GDX should breakout past all potential resistance wave structures, as that is what “C” wave bull markets are famous for. The majority will not clue in to a bigger bullish phase, until they are all bullish again. By the time that happens the gold stock bull market could be over. “C” wave peaks are also famous for creating blow-off spikes, which are usually produced by extension after extension. Mind you, many contrarian indicators also have to come in, as the Gold/gdx ratio is just one of them.

All the other gold stock related ETFs would also have to show us extreme readings. This is still far away so this mini crash should be just a correction.

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