On
my last post I explained divergence and the divergence setup between crude and
the U.S dollar. This time I look at the divergence setup between the gold
miners and the U. S.
dollar.
Our chart today is the daily closes –
as of last Friday - of the Market Vectors Gold Stocks ETF (GDX) plotted above
the daily closes of the US
dollar index as replicated by the PowerShares ETF (UUP). The technical
assumption here is that the two have an inverse relationship. So, when the UUP
prints a new trading high at (B) relative to the old high at (A) - we expect
the GDX to print a new low at (B) relative to the old low at (A). Clearly this
did not occur – note the slightly higher GDX gold miner low at (B) which is a
positive divergence condition creating a bull setup signal for the GDX. Keep in
mind this is a daily or short term signal and short term trend reversal studies
can generate false signals.
Posts
3 comments:
Do you think we're in a global bear market? Where do you see the S&P 500 at the end of 2016?
Shawn
Hi Bill,
Can you do some analysis on US health care & biotechnology? Do you see them resuming leadership in 2016-17?
Also, where do you think US small caps & mid caps are relative to the S&P 500? Will they return to a leadership position?
Thanks,
Shawn
PS. Your Nov 6th BNN analysis was excellent.
Hi Guys
I think a bullish 2016 with the TSX outperforming the S&P500
Health Care is still OK and the smaller caps should be strong through 2016
I would be cautious on consumer and strong on industrials
Bill C
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