GDX, Gold/GDX Ratio Bull Market Review

 

GDX-Aug-1-2016

 

GDX has been chugging along with a few more good corrections thrown in. Corrections happen when too many  non committed bandwagon riders jump on the bandwagon and then get thrown off as they hit a speed bump.   Emotional investors jump on (buy high) when they think that the bull market is safe in its trend.  Those who are just thinking of getting in have already left well over 240% gains on the table. 

We can be as bullish as a bull in a China Shop with this gold stock bull market, and I’m sure the contrarians just love it.  They may start to feel rich or richer with all the recent gains they have enjoyed.

I think we still have a month or so to go, but this bull market could top out as a “D” wave. “D” waves are phoney or false first waves as they can act and even look exactly like any 1 wave would of the same degree.  The general public does not know the difference as most of them are oblivious to pattern recognition. As long as something goes up, it’s a bull market in their eyes.  Again, there is still lots of upside room and GDX and gold may still have to go vertical before I can call that this bull market is dead.  

I’m starting to work the gold/gdx ratio again and today this ratio was sitting at 44:1. The most expensive ratio hit a bit over 29:1 and the  2016 gold/gdx ratio came in at about 84:1  The more GDX units you can buy with an ounce of gold the cheaper gold stocks are. At our present ratio of 44:1, it  would have to keep creeping down if gold stocks start to become more expensive when using gold as money. 

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