Gold-Stock Correction Mode

By Adam Hamilton – Re-Blogged From Gold Eagle

The gold miners’ stocks are mired in correction mode, which isn’t surprising after their mighty post-stock-panic upleg. Huge buying catapulting them higher left this sector extremely overbought. Corrections are normal and healthy after prices get too stretched technically. They eradicate upleg toppings’ excessive greed, rebalancing sentiment. That paves the way for bulls’ next uplegs, and offers great buying opportunities.

The most-popular gold-stock benchmark today is the GDX VanEck Vectors Gold Miners ETF. It includes the world’s biggest and best gold miners, dwarfing its peers in size. Launched way back in May 2006, GDX’s first-mover advantage has grown insurmountable. This ETF’s $17.9b in net assets this week are running 31.4x larger than its next biggest competitor’s in the 1x-long major-gold-miners-ETF space. GDX is king.

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Major Stock Selloff Looms

By Adam Hamilton – Re-Blogged From http://www.Gold-Eagle.com

The latest record highs in the US stock markets have unleashed astounding complacency.  Traders are utterly convinced that the past couple years’ massive Fed-fueled rally will continue indefinitely.  But with today’s lofty stock markets extremely overvalued, wildly overextended, and rampantly euphoric, a serious selloff is looming.  The prudent contrarians preparing for this inevitable major reversal are going to earn fortunes.

Though you wouldn’t know it from recent history, stock markets rise and fall.  They are forever cyclical, an endless parade of alternating bulls and bears.  Market history simply couldn’t be clearer on this.  Yet ironically after long bull or bear markets, the great majority of traders forget this.  They get caught up in their own emotions, and wrongly assume the long-in-the-tooth trend is the new norm that will endure perpetually.

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