After some wild trading in the gold market, everyone wants to know what’s next for gold and the mining shares? To help answer that question, today King World News is pleased to share a key portion of the internationally acclaimed work from Jason Goepert, founder of SentimenTrader, including a fascinating chart on insider buying.
Here is just a small portion of Jason Goepfert’s internationally acclaimed work: “The Metals & Mining sector collapsed in September, and hasn't participated much in the past month's rally. In reaction, public optimism is at near-record lows. But corporate insiders have been buying aggressively, setting up a “public vs insiders” situation. Insiders usually win.
In early October, we reported that corporate insiders had picked up their buying activity in the broader market, triggering a Buy Inflection from the excellent InsiderScore.com service.
Buy Inflections are instances of concentrated and accelerated buying activity by insiders.
While there were reasons to cast suspicions on that signal, mainly a reduced level of volume, stocks are indeed higher after suffering some short-term weakness. The Buy Inflection from insiders gave more credence to the idea that the mini-panic readings in mid-October were likely “it” for this sentiment cycle.
According to InsiderScore, one of the industries with the strongest buying pressure right now is Metals & Mining, which has been beaten up along with many other commodity-related issues.
This is particularly interesting, because the Optimism Index for the Metals & Mining fund, XME, is the third-lowest among the most active ETFs that we track, and is very nearly at a 7- year low (see chart above).
So we have a situation where the public is extremely pessimistic on that industry's prospects, while the smart money insiders who know that industry's ins and outs are optimistic and quickly ramping up their buying activity.
Ideally we would get this kind of combination when an asset is still in a long-term uptrend, but that's rare. Usually it happens in stocks and sectors that have been beaten like the Chicago Bears (sorry, but this is Vikings/Packer country).
Price is the final arbiter, so if XME can't hold above its June 2013 lows, we would not be sticking around in this fund, but it certainly deserves to be on the potential buy list of anyone looking at sector prospects.
Incidentally, buying pressure is also nearly the highest in five years in the Materials industry. We took a look at the Optix for XLB on November 3, as that one is showing extreme pessimism among the public as well.” This is just a small portion of today’s fantastic daily report. To try a free 14-day trial of the internationally acclaimed work that Jason Goepfert produces at SentimenTrader simply CLICK HERE.
UPDATE – KWN will be releasing many more interviews today, including another one with David Stockman.
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The audio interviews with William Kaye, Dr. Paul Craig Roberts, Andrew Maguire, Eric Sprott, Bill Fleckenstein, Rick Santelli, Rick Rule, Andrew Huszar, John Mauldin, Egon von Greyerz, Michael Belkin, and Marc Faber are available now. Other recent KWN interviews include Jim Grant and Felix Zulauf — to listen CLICK HERE.