The water torture decline in the gold sector continues.
The stocks keep dripping lower – just a few pennies every day. The action is trying the patience of anyone who’s bullish on the sector. And it’s ridiculing the few of us who have been publicly willing to say that “now is the time to buy gold stocks.”
But I’ve been the subject of such ridicule before. So, I’m okay with it.
Because it’s the point of peak ridicule that usually marks the bottom of a gold stock decline.
Let me explain…
I turned wildly bullish on gold stocks last November. The gold sector had fallen hard in October. And by mid-November, many of the gold stock charts were exhibiting bottoming formations. So, knowing that gold stocks often rally into the end of the year, I recommended buying speculative gold stock trades just before Thanksgiving.
Oops.
I was early. The VanEck Vectors Gold Miners Fund (GDX) tumbled all the way from $22.75 per share in mid-November to $21.25 per share by the time the sector bottomed in mid-December.
One month later, GDX was trading near $24.70 per share.
It didn’t matter if we were early. Traders who bought GDX in November and December made money on the trade.
That’s the situation we’re facing now. I’m bullish on gold stocks right here. The setup looks the same to me as it did last November. GDX has been falling by nickels and dimes just about every day for the past two weeks.
The sector is oversold. And there’s just enough bullish action – where the stocks open lower and then rally back higher by the end of the day – to keep me hopeful.
Frankly, though, I’m feeling a bit like a lonely fly-fisherman standing just on the shore of the upper Sacramento river in the early morning. I can see the fish all huddled together upstream. But so far, none of them is willing to snap at my line.
It’s just a matter of time and patience.
The setup in the gold sector today looks a lot like it did last November. The sector is oversold as we’re heading into a seasonally strong period for the gold stocks. So far, though, the gold stocks aren’t biting.
Lots of fishermen have packed up and moved on. But I’m staying put. I’ll keep casting my line.
We’ve been in this situation before. And it’s paid off well.
The gold-fish are all huddled together. All of the conditions are in place for a gold stock rally. But the fish aren’t biting yet. I don’t know what they’re waiting for. All I know is what I’ve seen before…
Once one of them snaps at my line, the whole group will jump into a feeding frenzy. Make sure you have a line in the water when that happens.
Best regards and good trading,
Jeff Clark
P.S. The line is set, the bait is wriggling… and as soon gold stocks make their move, my Delta Report subscribers are perfectly positioned to make huge profits. Like the 154% gain we made on Goldcorp, in just over a month, between December and January.
It’s all thanks to the unique way my option trading strategy works. And right now, conditions almost couldn’t be better. Learn more here.
Reader Mailbag
Today, two new Delta Report subscribers write in…
Dear Jeff, thanks so much for the presentation of your trading signals, the VIX included. It does help me a lot to manage my portfolio and is a service far more valuable for me personally indeed than even your trade recommendations. Keep it up, we love learning from you!
– Andre
Thank you for access to your system. I’m a new member and I have gone through the options guide and the first two videos, reviewed today’s VIX recommendation and read today’s Delta Report. I clearly need more time to understand and get comfortable with the processes. I will complete the instructional videos this week and continue reading Delta Reports. After that I will review the videos again and attempt a single contract. I appreciate your guidance.
– Phillip
And a Market Minute reader lends their thoughts on the gold market…
I am neither a buyer nor a seller, I am a holder. About 10% of my liquid net worth is in gold, silver, and platinum. I watch the prices and wonder when the range will be broken. My guess is that a day will come when one or more fiat currencies go bye-bye and precious metals will become more precious. At my age I might never see it happen, which is fine with me. Some of my heir’s will collect on my life insurance.
– Don
Thank you, as always, for your thoughtful letters and insights. Keep sending your stories, questions, and suggestions right here.