Loading ...Mike Ballinger:
I have been warning all of you against rushing to replace your miners (“HUI”) and the various ETF positions due to the numerous dead-cat bounces since the breakdown in late February which were the same type of bounces that lured me back in too early on previous occasions. Whenever I ignore the optimum entry point for the RSI, I end up getting punished so here we are at 31.29 for the HUI’s RSI which is, incidentally, the very place where they have turned IN EARNEST since the bottom in late 2015. Now, the vast majority of letter writers here at the PDAC in Toronto are unanimously insinuating that gold “might” have a corrective phase in here corresponding to the seasonal tendency for downside in March-April.
However, if you observe the seasonality chart for gold, you can see how mid-April offers such a superb entry point so the question “Do you sell here into the PDAC curse?” is “NO” because the bulk of the decline could quite easily ber behind us, especially with the RSI for the HUI now a tad above 30. The same applies to my number one trading vehicle for the mining stocks, the Junior Miner ETF (“GDXJ”) which was sporting an RSI above 75 back on Feb. 12th with the stock at $42.50. I warned you against the KoolAid guzzling which was rampant at the time because every single top had occurred from an RSI above 70 so now with the stock at $33.42, I see another $5 downside before the RSI breaks 30. However, that could be here by the end of the week so stay sharp and on your toes.