There has been quite a lot of talk about the value of these equities based on the performance of the precious metals. Compared to the Major US Equity Indexes, the performance in GDX (Gold Miners) and SIL (Silver Miners) is atrocious. This relative weakness in these sectors could bring further carnage with a minor correction or "Risk-Off" type environment in the S&P 500, never mind should Gold or Silver lose major support levels themselves.
I have every intention of owning these but from a perspective of probabilities in the chart analysis I want to see improving relative strength and bullish patterns of price and volume. Preserving capital for future opportunity is a core principle of mine.
(Click on charts to expand)
Until GDX broke out of trendline resistance of the large triangle any trade was subject to randomness or guessing. Losing trendline support on an increase in volume was bearish. GDX since lost another minor trendline support level last week.
The Silver Miners lost trendline support followed by more significant horizontal support last week.
I cover the analysis of the Mining exchange traded funds each
week in the service to subscribers and have wanted to get involved with
these funds for a position trade, but the
chart patterns have not allowed any entry to the long side with my methodology since starting the service.
Stay in tune with the ever changing phases of development and chart
patterns by subscribing next month. There is a special announcement for
a new model portfolio below.
There is incredible
bearish divergence in a majority of commodities when compared to the
Major US Equity Indexes, especially in "Agriculture", and when the
environment returns in Equities, I believe there will be "once in a
decade" like opportunity to put away real assets at bargain prices,
especially with the proper reversal patterns, confirmations in price and
volume, and improving relative strength. The new model portfolio will
be a "Hard Asset Portfolio" and will be primarily investing in
Commodities, Commodity Equity Producers, and the Foreign Currencies of
the Commodity producing and exporting countries.
Due to the current market state I am starting a second model portfolio that will be focused on "Long
Term Investing", and the triggers for the trades will be based on the
auction market analysis of the Weekly and Daily charts in those related sectors.
This new portfolio will begin March 1st, 2013. Email me in order to sign up.
More to come on the blog stay tuned...
Comments are welcome