Decoupling
June 16, 2022
Finally we are seeing the precious metals and their miners decoupling from the stock markets. As I type (11:20 am on Thursday, June 16, 2022), the GDX is up 2% while the QQQ and SPY etfs are down 4% and 3.4% respectively. Even better, the miners were lower on the day along with the stock market, on low volume, but then large buy orders drove the GDX into positive territory. What we want now is to see this behavior continue, so that market participants can easily see the best and only group, while they continue to lose in everything else, including momentum stocks like technology, bonds, even other commodity stocks such as oil and copper are getting hammered.
I added more to FSM and CDE this morning while they were red on the day, and am looking to invest more of the proceeds from the sale of junior explorers the other day. Below is the daily chart for GDX vs. SPY, not only having a nice jump, but also working back up over its 50 day moving average, which is also about to turn higher. With all moving averages sloping higher, this could start a new trend in the ratio, and investors would expect the miners to outperform the stock market for awhile in that case.
