With continued uncertainty in both the gold and silver markets, extreme readings are now taking place in gold and the mining shares.
From Jason Goepfert at SentimenTrader: “The Junior Gold Miner fund (GDXJ) is the most-hated ETF…
To find out which company is set to become one of the
highest grade producing gold mines on the planet
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Monday’s drop pushed the Optimism Index to a lowly 3, and the 5-day average is now below 20 (see chart below).
When the 5-day average has declined below 20 for the first time in at least a week, GDXJ showed a positive return over the next three weeks 15 out of 17 times, averaging a return of +4.8%. Its risk over the next three weeks averaged -4.9% versus a reward of +9.3%. That’s a larger risk than we usually see with extreme pessimism, but it’s a volatile fund.
King World News note: It is also worth noting that SentimenTrader has now lowered the risk for gold substantially to a 1 on a scale of 1-10 (see below).
King World News note: Capitulation is about as extreme as it can get at this point in the gold market. From a contrarian perspective this is a very bullish sign for the medium- to long-term time frame.
The charts and commentary above are from SentimenTrader. To try a free 14-day trial of the internationally acclaimed work that Jason Goepfert produces at SentimenTrader simply CLICK HERE.
***To listen to the extraordinary KWN audio interview with whistleblower Andrew Maguire, where he discusses the gold and silver smash, what is really happening with gold demand in India and China, government plans for capital controls and much more, CLICK HERE OR ON THE IMAGE BELOW.
***ALSO JUST RELEASED: James Turk – This Will Be One Of The Big Keys For 2017 CLICK HERE.
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