Short The S&P 500 And Go Long Gold Miners Time?

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The precious metals sector continues to be a “grind”, offering a few trades but mostly sideways to lower action. Gold prices have slogged along and this had held the Gold Miners ((NYSE:GDX)) back… until recently. The Gold Miners (GDX) and the broader Philadelphia Gold/Silver came to life in September and October.

The miners are in a multi-year down trend, however there is a potential bullish setup in place. See the chart below where we highlight the ratio of the Mining Index (XAU) to the S&P 500 (SPY (NYSE:SPY)). The ratio, which Gold Bugs want to see rising, looks to have created a bullish reversal last month at the 2016 lows at point (1).

And October is seeing a follow-through move to the upside.

If the ratio breaks out above falling resistance at (2), it would be suggesting a long miners / short S&P 500 trade.

Read more at : https://www.investing.com/analysis/short-the-sp-500-and-go-long-gold-miners-time-200349925

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