Comparing Gold Producers to Main Stream Stocks / Commodities / Gold and Silver Stocks 2019

Long term trends take a long time toreverse.  One such trend compares goldmining stocks to the S&P 500 stocks. From 2002 until 2011 gold mining stocks outperformed generic stocks, ascan be seen in the following chart.  (Chartscourtesy Stockcharts.com).

    
The trend unmistakably featured miningstocks ($HUI) over the S&P 500 stocks. From 2011 until recently, the trend reversed, putting Wall Street backin the lead.  Our next chart shows thatwe may be about to see a trend favoring miners again.

    
Featured is a chart that compares goldproducers (GDX) to main stream stocks ($SPX).  The fan blades highlightincremental breakouts that show miners are outperforming generic stocks. Breakout #4 inched above the 50 week moving average (blue line), #5 closedabove the 200 week moving average (red line), for the first time since2016.  The blue arrow points to the spot where another fan blade is likelyto be drawn.  The moving averages themselves are rising for the first timein years!  Seasoned observers considerthis a very bullish setup, resulting in money leaving generic stocks and movinginto the gold sector!

Not to be overlooked is the silverproducers sector, represented here by a chart of SIL the silver producersETF.  Silver usually outperforms goldduring a bull market, and SIL is breaking out from congestion, within therising blue channel.  A close above theblue arrow will confirm the breakout, which could happen this week!.

DISCLAIMER: Please do your own due diligence. Peter Degraaf is NOT responsible for your trading decisions.

Happy trading!

By Peter Degraaf

Peter Degraaf is an on-line stock trader with over 50 years of investing experience. He issues a weekend report on the markets for his many subscribers. For a sample issue send him an E-mail at itiswell@cogeco.net , or visit his website at www.pdegraaf.com where you will find many long-term charts, as well as an interesting collection of Worthwhile Quotes that make for fascinating reading.

© 2019 Copyright Peter Degraaf - All Rights Reserved

DISCLAIMER: Please do your own due diligence. I am NOT responsible for your trading decisions.

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