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Thursday
Jul182019

Multi-year Breakout in Precious Metals and Miners.

The Train has left the Station for Precious Metals and Miners.

Gold, silver…and most especially the miners…had major moves higher. VRA holdings in this group up a combined 140%+ in the last 3 days, but folks, this move looks to be only just beginning.

GDX (Miner ETF and underlying structure for NUGT) traded a nice 84 million shares, which provides additional confirmation on the breakout for us. If you’ve been following our work for long you know that we want to see back to back days of 80 million + shares traded in GDX for rock solid confirmation that the next major move higher is “on”.

Of the bullish signals for PM’s and miners, none is more bullish than when the miners are leading the commodity price higher. Check out the relative strength chart below of GDX to Gold. Beginning last September, GDX began to significantly outperform gold. Because the leverage is in the underlying equities, this is just what a PM bull wants to see. As can be seen, the outperformance is actually picking up speed.

Our next target is $30+ for GDX. Roughly 13% higher from here. And it’s nice to see others begin to confirm our work on relative strength analysis. When the miners lead, our most powerful moves occur.

ST trading note: yes, the miners are approaching extreme overbought readings. But check out gold. Nowhere near overbought. Not even close. Gold looks ready for a sharp move higher…which of course will propel the miners as well. Just how its supposed to work, in major breakouts in this space. And look at the volume build. Chart perfection.



A final note on this group; in the recent past, following big moves higher, the manipulators have commonly taken down gold/silver overnight. That didnt happen last night. Tells me the move higher will continue. All VRA miners remain a buy.

Investor Sentiment

Lastly for today, here’s the latest AAII Sentiment Survey. Bulls have finally surpassed both bearish and neutral readings. When this survey starts approaching 60% bulls we’ll begin aggressively taking profits in our US broad market lev ETF positions.

Until next time, thanks again for reading…

Kip

Since 2014 the VRA Portfolio has net profits of more than 2300% and we have beaten the S&P 500 in 15/16 years.

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