A quote from Vanguard founder Jack Bogle really resonated with me today. Evidently Bogle was on CNBC this morning (I wouldn't know because I don't own a TV and I don't watch any financial news or any other news for that matter) and delivered the following knockout punch to the very talking heads he was presumably speaking with: 

“The daily motions of the market are like a tale told by an idiot: full of sound and fury but signifying nothing."

Brilliant. This quote is particularly timely given the whipsaw action we've seen in equities this week. The "signifying nothing"  part also immediately brought to mind the price action we've seen in the precious metals mining sector during the last couple of months (and really much farther back than that):


GDXJ (Daily - 2 Months)

The above chart is the GDXJ since February 6th. A hot mess.

The GDXJ opened at $31.96 on February 6th and today it closed at $32.06 which basically makes the junior gold miners unchanged during the last couple of months. Meanwhile, the day-to-day price action has been especially choppy/messy with 20 up days and 21 down days since February 6th. This is a directionless market if i've ever seen one.

If we go back farther in time things aren't much different in terms of overall direction in the GDXJ, it's just much more volatile over a longer time frame:


GDXJ (Daily - November 2016-April 2018)

The GDXJ is essentially unchanged since the open on November 25th,  2016 - the sector has just experienced more volatility including 3 sizable rallies and 3 equally sizable declines during this 16 month time period. 

Trying to make sense of the market's day-to-day gyrations (particularly in the junior gold mining sector) is a fool's errand, and about the only market timing tool which has worked well in the miners recently is to play sentiment extremes i.e. buy when sentiment is extremely depressed and sell when sentiment is becoming overheated.  

At this point I'd agree with Bogle that the daily motions of the junior gold miners are like a tale told by an idiot, we're just missing the sound and fury part...


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