Here are some links to check out....

Potential Upside Target for GDXJ
A brief article in which we touch on the oversold condition and make the case for an upside target in GDXJ.  

Precious Metals Video Market Update
We recorded this video earlier in the week. Covers several topics. 

Global Macro Charts
Tiho's post contains many great charts. 

It Could not Look Better for PMs in 2015
Do you agree with Clive Maund?

Premium Snippets

This chart was not included in the update but it allows me to pontificate as to the greatest buying opportunities of all time in the gold stocks. Two criteria could be how oversold the market is and then its potential upside. The latter is also determined by where the market is in its long-term cycle and its valuations at that point. 

Anyway, below is the Barron's Gold Mining Index back to 1938. We also plot the index's distance from its 50 and 80-week exponential moving averages. It can serve as an oversold/overbought indicator. Gold stocks are enduring their second worst bear market ever. Thus it's not a surprise that in recent weeks they reached their 3rd most oversold point 16 years or their 4th most oversold point since the early 1980s. 

In my opinion, the greatest buying opportunity of all time was in 2000. Gold stocks hit a 24-year low and valuations were potentially near all-time lows. Going further back we can also consider 1976, 1970 and the early 1960s. Obviously 2008 was a great buying opportunity and perhaps similar to 1970. The best buying opportunities are always at the start of secular bull markets. It's quite clear that 1960 and 2000 were the two best buying opportunities.

In terms of the potential for immediate gains, 2008, 2000 and also 1960 were great opportunities. I expect that the immediate gains from the coming bull market will rate very close to what we saw in 2000 and 2008.  

Moving on, we included this chart last week. I checked it today and noticed that the put-call ratio for GDXJ continued to spike. This is now at a multiyear high. Considering the spike and the little rally in GDXJ, it's a very bullish sign. 

Here is a daily line chart of GDXJ. We plot the rally percentages (of its four rebounds) since 2012. If GDXJ rallies to $33 it would be a 55% rally from its recent low. Over the past 10 months GDXJ has only had that 45% rally in late spring and a little pop in November. 

Is this the start of another bear market rally or will it morph into a real bull market? I don't know but I try to provide a few insights with respect to our portfolio and how we are trading it. 

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Thanks for reading. I wish you all great health and prosperity in 2015! 

-Jordan

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