
In the first week of February did an update on precious metals and stated that we were “getting concerned that gold stocks are going to renew their down trend”. Then two weeks ago we reiterated our pessimism due to the lack of tweets talking about being buyers of gold stocks. As we look at the charts again today we’re even less hopeful than before. Gold (GLD) had a small bounce above the $150 level and now appears to be ready to break it. Since the first of the year our Twitter sentiment indicator for GLD has mirrored the movement in price. This tells us that traders and investors alike are confused and are simply chasing price. When traders are making “rational” judgements about the future prospect of a security sentiment plots its own path. Short term traders often take profits on bounces and buy on dips, which shows up in our sentiment indicator as divergences from price near turning points. When market participants are confident in the direction of a