Investors listening to the Commodity Countdown webinar will have been all over this Gold trade already. However, for those that were not able to follow it, Gold Miners are breaking out in terms of Relative Strength and in terms of positive price action. Below is the chart of GLD which tracks gold and we can see it is testing the 200 DMA today.
This 200 DMA level has been a friction point in the past, but you'll also notice that while the rest of the market was pushing down hard, GLD has been rising for 6 weeks.
The miners look very interesting here. This is the Canadian traded Global Gold Miners fund.(XGD.TO). The purple SPURS (SP 500 Relative Strength) is breaking out to new 6 month highs and the SCTR ranking has just surpassed 90. It is also at the highest level on the 18-month chart. We can see the critical level of resistance is being tested today on the chart.
Here is the US version, GDX. The funds are slightly different in composition and have some currency effects in there. The GDX SCTR ranking is 97.7 which is the highest on the chart in 18 months. We can see it made new three-month highs on the SPURS today but needs a little more power on the indicator to make it to six-month highs.
We will look at the SCTR ranking in Canadian Stock Exchange because the exchange has so many Gold Miners. Lots of them are dually listed in the USA. Over half of the miners have an SCTR greater than 75. With that sort of breadth, this industry group looks poised to rise to the forefront. Anyone looking for 3 month highs in Relative Strength will get this group on their radar today for the first time in a long time. Another 1/4 of the group is above 50 and below 75. Again, the SCTR ranks the positive price action of the stock. This industry group is clearly leading the SCTR tables in terms of numbers of stocks. It is doing as well as Utilities and Consumer Staples.
Some of the charts are breaking out to new 3-month, 6-month and 12-month highs. Just to take one near the top of the ranking, Endeavour Mining (EDV.TO) is roaring.
There are lots to choose from, find some that fit your trading style. I think there might be gold in them ther' hills yonder. Might be time to pick some miners to find it. As long as the $USD keeps weakening, this trade looks more and more powerful.
I will be doing another Commodities Countdown Webinar on Thursday @ 5 PM EST looking for opportunities in the Commodities Sector. If you can squeeze out time towards finding some trading opportunities in your schedule, I hope you'll join me. We might have a special guest with us as well. Commodities Countdown Free Webinar 20160203.
Click the Yes Button below for a few emails a week in the Commodity Sector. You can also follow me on Twitter @schnellinvestor.
Good trading a-'er mining,
Greg Schnell, CMT
