Sunday, February 14, 2010

Bullish Trading Signals in the Gold Sector

Stumbled onto some good statistical trading data over at Trader's Narrative while doing a search on Gold sentiment info. I sensed a serious lack of bullishness in the Gold sector and wanted some data to confirm it. Data from the piece over at Trader's Narrative (aptly titled "Gold Sentiment: Dumb Money Rushes Out") confirm my hunch. The chart in their piece speaks strongly for a bottom and the following quote has me very excited:

"According to Elliott Wave, the 10 day moving average of the Daily Sentiment Index has fallen to just 20.1%... the DSI [Daily Sentiment Index 10 day moving average] has fallen below its levels last seen in November 2008."

This is INSANELY BULLISH. As a disclaimer, I haven't seen this Elliott Wave data myself (typical third-hand internet reporting...). Sentiment is more bearish in the Gold patch now than at the bottom of the Great Panic of 2008?! The infamous hedge fund manager Paulson can't raise enough global money to match the $250 million of his own money he's putting up? Small speculators (i.e. "dumb money") are more bullish on the U.S. Dollar than at any time in the last decade?!

And here's a 2 year daily Bullish Percentage chart on the $GDM (i.e. the index behind the GDX Gold mining ETF) thru Friday's close:

Lastly, courtesy of The Daily Gold, here's the put-to-call ratio chart for the GDX ETF:

Everything is in place for a good rally in the Gold patch. We'll see what happens... provides you with the information to make the right decisions on your AU 5 Day investments

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