On March 26th, 2020 there was a confirmed "death cross" in the GDX Gold Miners ETF - the death cross is typically considered to be when the 50-day simple moving average crosses below the longer term 200-day simple moving average. Financial media likes to make a big deal of death crosses, but the truth is that they are often more bullish than they are bearish, especially when looking out on longer time frames (weeks and months).
As it turned out, the death cross in the GDX led to three more days of selling (down to support at ~$23.00), followed by a more than 30% rip higher in one of the most memorable bullish reversals i've ever witnessed. Looking back at history, the GDX hasn't had a good track record after past death crosses (death crosses in 2008 and 2013 led to waterfall declines). The fact that this one has so quickly given way to such a powerful upside reversal is indicative of a strong bullish change in character in the gold mining sector.
Turning to the chart of the Gold/S&P 500 ratio we can see a bullish flag pattern has emerged with the daily-RSI(14) poised above the median line after the recent consolidation. An upside breakout from this bull flag would target fresh multi-year highs in the Gold/S&P ratio:
Gold/S&P 500 Ratio (Daily)
Today's price action (not updated on above chart which uses daily closing prices) has the gold/S&P ratio testing the top rail of the bull flag which merits close attention over the coming days.
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