A few weeks ago we did an update on Gold (GLD) and Gold Stocks (GDX) where where stated that it was critical for them to hold their trend lines from the May 2012 lows.  Well GLD has held the trend line, but GDX has not.  We’re getting concerned that gold stocks are going to renew their down trend. We’ll give the negatives first, then move on to the positives (or what might better be called a sliver of hope).  We already mentioned GDX breaking its most recent up trend line.  Now there’s more bad news in that GDX has also broken back below the downward sloping trend line that goes back to the August 2011 highs.  It is now consolidating below that line.  When GDX broke and consolidated above it we thought the worst was over for precious metals.  Now that it’s consolidating below the odds favor  a resumption of the down trend.  The break of both trend lines brought with it very negative Twitter sentiment that shows the backs

Read More…

My reading on gold stocks is that they’re probably not finished declining.  GLD has been trying to hold the 150 area for nearly three months while GDX and GDXJ have had a rally with a trend line failure.  Previous failures have resulted in fairly severe sell offs. However, there is some good news in the charts.  Notice the volume on the recent rally was very high for GDX.  Then as it started selling off as volume is drying up.  This is different than the two previous rallies that failed (they had low volume rallies and higher volume sell offs). So what would I do? If I held absolutely no precious metals in my portfolio I’d be willing to dip my toes in the water at these prices as a hedge against the European debt crisis escalating.  The position would NOT be an inflation hedge.  It would be a hedge against a confidence failure in the Euro as a currency.  I’d be buying with the expectation that I’ll add more to

Read More…