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SPX Vs. Gold Bugs: Reversal May Be At Hand

Published 01/30/2017, 11:24 AM
Updated 07/09/2023, 06:31 AM

The chart below looks at the relationship between the S&P 500 and Gold Bugs over the past 20 years. The ratio fell for nearly a decade as miners were much stronger than the S&P from 2001 until 2011. During the past 6 years, the opposite has been true, as the S&P 500 has been the place to be -- not the miners.

Is the trend about to change? Is a major topping pattern completed? Check out the ratio below.

S&P 500 Vs. HUI Gold Bugs (ratio)

The trend in the ratio has been up since the lows in 2011. A reversal pattern (bearish Head-and-Shoulders top) may be in play.

Premium Members bought GDXJ at (1) and also own RWM, forming a pair trade that's long junior miners and short junior stocks.

Could Gold Bugs (Miners) out perform the S&P for years to come? We shared this idea on 1/5/207.

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