Sure enough, GDX fell for a few days. It lost about 5% over the next week – dropping to about $37 per share. But, it quickly reversed course and exploded higher as the BPGDM rallied back up to 100. GDX closed near $44 per share earlier this week.<\/p>\n
I’m still wiping the egg off of my face. But, I’m not buying gold stocks right here – because the BPGDM just triggered another sell signal.<\/p>\n
Take a look…<\/p>\n
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In most cases, a sector is overbought – and subject to a correction – when its BPI<\/a> rallies above 80 (meaning 80% of the stocks are trading in bullish<\/a> technical patterns). A sector is oversold when the BPI dips below 30. The BPI generates a sell signal when it turns lower from overbought conditions, buy signals occur when the BPI turns higher from Gold stocks fell sharply, anywhere from 12% to 30%, following three of the previous four BPGDM sell signals. The sell signal in early July<\/a>, though, yielded only a small decline. So, traders might be tempted to disregard the new sell signal that triggered yesterday.<\/p>\n That’s probably a mistake.<\/p>\n Prior to this month, the only other time I can recall the BPGDM hitting 100 (its highest level possible), was back in July of 2016. GDX peaked a few weeks later. And, six months after, most gold stocks were down 40%, or more.<\/p>\n Of course, I won’t say we’re headed for something similar this time around. But, the BPGDM has proven to be a very reliable indicator for pointing to reversals in the gold sector. And, with it flashing its second sell signal in under a month, it seems to me there’s probably more risk in the gold sector than many traders currently appreciate.<\/p>\n At the risk of having to wipe even more egg off of my face next month, I suspect most gold stocks will be lower in the weeks ahead.<\/p>\n Best regards and good trading,<\/p>\n Jeff Clark<\/p>\n P.S. <\/strong>After reaching a new all-time high, everyone’s wondering what gold is going to do next. It’s reminding me of August 2011 when everyone was having “gold fever,” yet I predicted that gold was going to drop – which at the time was a very bold prediction… and folks didn’t want to hear it.<\/p>\n I’m not a gold expert, but I ended up being right. In 2012, gold fell over $150 an ounce… and my subscribers who followed my gold trade were raking in profits of 226%… in just one week. Not many predicted the gold fall, but that’s why I’m telling you I see the same patterns happening again right now<\/a>.<\/p>\n Over the last three decades, I’ve developed a reliable technique to predict how gold is going to move in the short term. If you already own gold, or plan to invest in it soon, I recommend you watch my presentation about my gold trading techniques you can use to potentially fund your retirement… and then some. Click here to watch<\/a>…<\/p>\n In today’s mailbag, Robert thanks Jeff for his guidance…<\/p>\n Hi Jeff, I just want to thank you for your generosity in sharing your deep insights into the markets during these rather crazy times. Your decades of experience and calm, methodical approach is a breath of fresh air. I continue to learn from your emails, even though I already have quite a bit of experience. All the best to you.<\/p>\n
\noversold levels.<\/p>\n![](\"https:\/\/casey-assets.s3.amazonaws.com\/images\/misc\/jeff-clark-signature.png\")
<\/p>\nReader Mailbag<\/strong><\/h2>\n
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