Tuesday, July 9, 2024

Good Morning!

The advance/decline line is a trusty leading indicator for any market or sector. It measures the amount or percentage of stocks that are rising against the amount that are declining.

It is a participation indicator and it reliably (though not always) functions as a leading indicator.

Last week, the GDX advance/decline line made a new 52-week high, for the first time since 2020!

But wait. There's more!

The gold stocks are quietly acting bullish relative to Gold. We chart Gold and GDX vs. Gold (middle) and GDXJ vs. Gold (bottom).

The GDX to Gold and GDXJ to Gold ratios recently held their 200-day moving averages and are threatening breakouts from inverse H&SH bottoming patterns.

(And GDXJ is showing a positive divergence against GDX).

Recall our analysis that gold stocks are options on Gold and they provide the best leverage after Gold breakouts.

Gold is undergoing its first pullback/consolidation since the breakout. And now we are seeing the miners start to lead.

Gold got crushed yesterday and the gold stocks absolutely yawned.

7 of our Top 10 stocks were higher!

Read our editorial to understand the significance of the next move in Gold. (Maybe miners are just starting to smell this). 

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