{"id":20826,"date":"2023-04-21T07:30:18","date_gmt":"2023-04-21T11:30:18","guid":{"rendered":"https:\/\/www.jeffclarktrader.com\/?p=20826"},"modified":"2023-04-21T07:30:18","modified_gmt":"2023-04-21T11:30:18","slug":"my-blasphemous-prediction-for-gold","status":"publish","type":"post","link":"https:\/\/jeffclarktrader.com\/market-minute\/my-blasphemous-prediction-for-gold\/","title":{"rendered":"My Blasphemous Prediction for Gold\u2026"},"content":{"rendered":"

Gold stocks look vulnerable to a sell-off.<\/p>\n

That’s not going to be a popular comment.<\/p>\n

No doubt, some readers may scream “BLASPHEMY” and vow to never read my comments again.<\/p>\n

But stay with me here. I remain quite bullish on the longer-term prospects for gold and gold stocks. It’s the short-term setup that is causing me problems.<\/p>\n

For the past few months, the gold sector has been on fire. The Van Eck Vectors Gold Miners Fund (GDX) is up nearly 50% since we pounded the table to buy gold stocks last October<\/a>.<\/p>\n

But the conditions today are different than the conditions back then.<\/p>\n

In October, the gold stocks were violently oversold and almost no one wanted anything to do with them. <\/p>\n

Today, the gold sector is wickedly overbought. And almost everyone – including most talking heads on financial television – is bullish on the sector.<\/p>\n

More importantly, my favorite gold sector trading indicator is overbought and approaching a “sell” signal…<\/p>\n

Take a look at this chart of the Bullish Percent Index for the gold sector (BPGDM)…<\/p>\n

<\/p>\n

\"Image\"<\/p>\n

The BPGDM measures the percentage of gold stocks that are trading in a bullish technical formation. It’s a gauge of overbought and oversold conditions.<\/p>\n

Since it’s measured as a percentage, a bullish percent index can only reach as high as 100% or fall as low as zero.<\/p>\n

Typically, a sector is extremely overbought when its bullish percent index rallies above 80%. It’s extremely oversold when it drops below 30%. <\/p>\n

<\/p>\n

\n
\n

Free Trading Resources<\/strong><\/p>\n

Have you checked out Jeff’s free trading resources on his website? It contains a selection of special reports, training videos, and a full trading glossary to help kickstart your trading career \u2013 at zero cost to you. Just click here<\/a> to check it out.<\/p>\n<\/p><\/div>\n<\/div>\n

<\/p>\n

Trading signals are generated when the index reaches extreme levels and then reverses.<\/p>\n

The red arrow on the left-hand side of the chart points to the only sell signal triggered last year. The red arrow on the right-hand side of the chart points to where we are now.<\/p>\n

BPGDM is approaching 80. It’s nearing the sort of overbought conditions that lead to a sell signal.<\/p>\n

Yes, there is room for it to work higher. So, maybe the gold sector can continue its rally for a little while longer.<\/p>\n

But the air is getting thin…<\/p>\n

After a 50% rally in six months, the gold sector is closer to a top than it is to a bottom. There is more risk than there is reward.<\/p>\n

After all, GDX fell 45% in five months following last year’s BPGDM sell signal.<\/p>\n

Best regards and good trading,<\/p>\n

\"Signature\"<\/p>\n

Jeff Clark<\/p>\n

<\/p>\n

\n

READER MAILBAG<\/h2>\n<\/div>\n

When do you think we’ll see gold top-out and begin to reverse?<\/p>\n

Let us know your thoughts – and any questions you have – at feedback@jeffclarktrader.com<\/a>.<\/p>\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

After a 50% rally in six months, the gold sector is closer to a top than it is to a bottom\u2026<\/p>\n","protected":false},"author":55,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"ep_exclude_from_search":false,"service":"","footnotes":""},"categories":[1],"tags":[],"publication":[10],"person":[7],"newsletter-type":[],"ticker":[],"class_list":["post-20826","post","type-post","status-publish","format-standard","hentry","category-market-minute","publication-market-minute","person-jeff-clark"],"acf":[],"_links":{"self":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/20826","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/users\/55"}],"replies":[{"embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/comments?post=20826"}],"version-history":[{"count":0,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/posts\/20826\/revisions"}],"wp:attachment":[{"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/media?parent=20826"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/categories?post=20826"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/tags?post=20826"},{"taxonomy":"publication","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/publication?post=20826"},{"taxonomy":"person","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/person?post=20826"},{"taxonomy":"newsletter-type","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/newsletter-type?post=20826"},{"taxonomy":"ticker","embeddable":true,"href":"https:\/\/jeffclarktrader.com\/market-minute\/wp-json\/wp\/v2\/ticker?post=20826"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}