The Chart that Called the Bottom?

I’ve posted this chart many times because it makes a bullet-proof case that the gold stocks are on the cusp of a rebound,at the least. In the chart below we only included the bears most like the current one (black). In blue we show how much the market recovered after that bottom. The current bear (chart as of Friday) is remarkably similar in time and price to the 1968-1970 bear and quite close to the 1974-1976 bear. This chart can’t call the exact bottom to the day but it comes damn close!

Below is a weekly candle chart of GDX. The week before the bottom we discovered that $21.99 was a very strong Fibonacci target in-line with the 2011 all time high and 2012 bottom. Furthermore, note the bullish candlestick action. GDX bottomed (within 1% of $21.99) and made a bullish hammer on record volume. The next two weeks the low was tested but the market closed off it and the second week at the high. Then last week the market had a strong week, further confirming this bottom.

We’ve added positions in recent weeks and think there will be one more opportunity before the rebound really accelerates. We’ve studied how these rebounds evolve and there is always a period of correction or consolidation around the 50-day MA which separates the initial rebound from the longer and more accelerated move.

The above charts came from Sunday’s 14-page update. In the past 10 days we’ve updated reports on our top 5 core producers and these updates include price targets at various metals prices. We’ve updated reports on a few other companies and are working on reports on new companies. If this is a major bottom inline with 1960, 1976, 2000 and 2008 and we are correct then there are numerous stocks which will recover substantially. We are looking for quality combined with signs of market leadership and significant upside potential beyond the initial rebound.

Consider a subscription if you’d like some professional guidance, information and analysis at a time that could be the start of the next cyclical bull market. Have a great day!