trendfollowing gold stocks
May 19th was recent the top in The Gold Miners Index (GDM). From the March low, the Index was outperforming the S&P 500 Index on a relative strength basis. The Index is down, on a closing basis, approximately 13%. From the May 19th top, before the FOMC Press Conference June 16, 2021, the index gave four new 5 day lows, before the first of three new 21 day lows, on June 16th .. the mini crash. So for some investors and traders, this is significant, and for others completely meaningless. At a very minimum, stocks almost always show signs of weakness well in advance of trouble. Most of the time these indications happen well in advance of “news”. Mr. Market knows. The most successful trend-followers follow price action and not news. Investors and traders who are addicted to news and message boards under-perform, because, news follows the market.
So where are we now? As of the close, on Friday, July 2nd, looking for Bullish new 5 day highs and/or new 21 day highs, and Bullish relative strength vs. the S&P 500, or at least a positive annualized growth rate, The Gold Miners Index has indicated none of these..yet.
Gold Miners Index (GDM):