On the heels of the dollar plunging and gold surging, along with the mining shares, KWN asks that you take a quick look at this chart in the gold sector.
The following commentary is from Jason Goepfert at SentimenTrader: Wednesday’s collapse in the U.S. dollar provided fuel for gold and the miners. That caused a big spike in Optimism, reaching 96 on the GDX fund (see chart below).
In that fund’s history, whenever the Optimism Index reached 95 or higher, three days later GDX was higher only 31% of the time, averaging -1.5%. There have been signs of a long-term bottom forming here, but short-term it is difficult to buy into something that is showing extreme optimism.
King World News note: Gold, silver, and the mining shares may have bottomed. If you look at the GDX chart above, you will notice that the two previous tops were just taken out on the upside with the most recent thrust. If you are looking to accumulate mining shares, just be aware that sentiment is showing a bit of excessive optimism at the moment.
In these type of conditions, some veteran traders may try to wait and buy into some weakness, instead of chasing share prices higher. Having said that, some of these companies are so grossly undervalued and oversold on a longer-term basis, that significant moves to the upside are most likely the path of least resistance.
These charts are just a portion of one of the latest fantastic reports. To try a free 14-day trial of the internationally acclaimed work that Jason Goepfert produces at SentimenTrader simply CLICK HERE.
***KWN has now released the powerful audio interview with Peter Boockvar, where he warns we haven’t seen real chaos yet, but it’s coming and gold is going to skyrocket, and you can listen to it by CLICKING HERE OR ON THE IMAGE BELOW.
***ALSO JUST RELEASED: Two Legends Just Issued Major Alerts CLICK HERE.
***KWN has also now released the extraordinary audio interview with legend Rob Arnott, who oversees $155 billion. He discusses the carnage in global markets, what to expect next as well as some remarkable investing strategies for investors to weather the global storm, and you can listen to it BY CLICKING HERE OR ON THE IMAGE BELOW.
© 2015 by King World News®. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. However, linking directly to the articles is permitted and encouraged.