Gold stock sentiment indicator.
It is pretty clear that many gold stocks were oversold over the last month, given POG fell nowhere near what doomsayers were predicting.
As this run up from the low has been vertical, I now anticipate a month of consolidation for stocks.
A similar run to this level occurred in early January this year. A similar run also occurred in May last year though from a much lower base (25%). You can refer to earlier charts that show this.
Both times were followed by pull backs or sideways sentiment though for stocks, it was more about rebalancing. A chance for the better companies to catch up and the more speculative to take a breather.
For some idea of how this next month may play out, have a look at your favourite stock performance between:
17/5/19 and 11/6/19.
And 6/1/20 and 5/2/20.
This should give you a good idea of what to expect for the next month.
Of course the US elections are the great unknown.
As the election results will be due in about 1 month, timing for the next run is uncannily tied to the current cycle.
Immediately post-election, I am extremely bullish for POG and stocks.
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This is not advice but my interpretation of what to expect over the next month.
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Leading indicators have pulled back sharply to below 40%.
A bit of an over-reaction so today should be quite reasonable.
Here is the indicator.
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