Gold Shorts Stuck in the DUST Bowl

After being so vocal for so long, precious metals and miners bears have been noticeably quiet of late. In this business, it sure is easy to be in cheerful spirits and brimming with confidence with things are going well. But when the tide changes, it is usually only then that we see whether the confidence is true or instead is a thinly-veiled facade. With this in mind, you almost get the feeing that precious metals and miners bears are still shorting this move higher in recent weeks all the way up, fully expecting an imminent rollover. And, yet, it has not happened, as each bout of weakness has seen bulls emerge with a newfound sense of purpose, as we have been profiling since mid-November. On the updated monthly chart for the GDX, ETF for the senior gold miners, below, note how price has been responding to the 2008 crash lows (light blue line), despite an apparent breakdown from the purple lines--A consolidation which bears have been touting as a slam-dunk trade lower. The action in January (yellow arrows pointing to the monthly candlestick, thus far this month) points to a potential false breakdown. From false moves often come aggressive moves in the other direction, which is why I have been so active of late in playing the long side with leverage, namely recent big wins in JNUG NUGT USLV, etc.. Also note that this increasingly bullish price action in the precious metals and miners has been occurring with jaw-dropping strength in the U.S. Dollar, and the Tapering of QE, two factors which precious metals and miners bears had been pointing to as part of their slam-dunk crash thesis, with DUST (the triple-short gold miner ETF) being a logical play for them. When markets rise in the face of apparent technical and fundamental headwinds, it tends to be wildly bullish going forward. I will still trade around the levered ETFs for now. But I remain on watch for fresh entries on the long side going forward.