GDXJ Gold Stock 2011-2018 Review

 

It took me a long time to count out the GDXJ bear market, but only until I concentrated on diagonal wave structures did it start to make sense.  I thought we would get a zigzag bull market but that has no materilzed by any streach of the imagination.  The fast 2016 move up  has been followed by a bearish phase that looks nothing like a correction that has finished.  Many of the Gold stock ETFs I track had new record lows in early 2018. This is well over a year where gold stocks are out of sync with each other.

In the 2008 gold stock crash, they were not this far out of sync as they are now. Even though gold has shot up a bit in the last few days, these ETFs have been rather subdude.

The big question is if the 2016 rally, is not just another bear market rally!  Gold analysts have been very bullish but yet gold stocks seemed to be ignoring the bullish rhetoric.

One undeniable fact is that all bear market rallies get completley retraced, and about the only way we can confirm this is when it happens. Support means little as it’s always a question, “Support for what?” Support for the next leg up, or just temporay support before the next trip down?

The straight move up from the 2016 bottom is typical for a bear market rally so until this proves out I will remain bearish on gold stock ETFs.  I own one gold stock and a gold stock fund that pays some dividends which I will keep, otherwise I have been short several CAD gold stock ETFs and have no plans on closing them off.

From what I see may happen, is once this new low materilizes then we will be swamped with good buying opportunities, so those that have a bit of cash might be lucky enought to take advantage of it. I think we should end on a Primary degree “A” wave, which should be followed by another huge bullish move in 2019.

What this gold stock rally has done, is get more people excited and involved so when the next bullish phase comes along these added investors will push the markets much further north than anticipated.

The Gold/Gdxj ratio is sitting at 39.36:1 which has been about the same for most of April and May 2018. I would rather see it get closer to 49:1 before GDXJ may look cheap again.

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