Holed Up, Down But Not Out

Between the emergency bond buying measures both in England and then overnight in Japan against the backdrop of sticky high inflation, gold seems to have been the odd man out of late. 

Markets, however, have a history of marching to their own drumbeat. And just because something does not materialize immediately does not mean it will not in due time--In fact, recent market history suggests a delayed reaction of sorts (e.g. the first two months of 2020 where markets ignored Coronavirus spreading around the world). 

Hence, seeing the GDX (ETF for gold miners daily chart, updated below) hold its trend-line extended from the previous breakout is a step in the right direction despite how many want to dismiss it. 

In my view, any weakness from here in the U.S. Dollar will further ignite a rally in commodities, which we know oil and oil stocks may already be front-running. Said rally could easily last into the holidays, as I suspect a fair amount of market players either short commodities for an imminent deep recession or unloaded longs for similar reasons, further igniting a chase.

Beyond that, many commodity names are, pound for pound, infinitely cheaper and better values than most growth stocks regardless of the eye-popping YTD percentages you see thrown around--They are still not cheap or anything close to it in most cases. 

Put another way, any further strength from here in GDX, especially above $24, add credence to the idea of a higher low in place to offer context for a long overdue rally in gold miners. 

I should also add, much like energy stocks two years ago preciously this time of year, I am seeing the same sort of apathy regarding gold miners which is typically what you love to see from a bullish contrarian angle in behavioral finance.