But let me tell you, these possibilities do not include the concept that the gold miner breakout (or failure of same) is to be viewed as an early warning indicator about deflation; as in, if the gold stock breakout fails, deflation will be indicated.
There is analysis out there this morning (I'll keep it anonymous, as it is the concepts and perceptions that are important here) recommending watching the gold miner breakout as an indicator of deflation:
"If Friday’s breakout in gold mining stocks cannot hold, meaning GDX closes below 64.19, we believe it is a deflationary signal and a negative for stocks (SPY), silver (SLV), and gold (GLD)."
The article also advises readers that "it might be nice to forward a link to this article to a friend, family member or co-worker" so that they too may be apprised of the implications.
This is well and good; the breakout very well may fail (although a daily close at new highs does not make a breakout, nor does a daily close below make a failure) and if it fails, we go back to slopping around in the muck of ongoing analytical parameters as we go forward and depend on a deflationary issue cropping up with regard to a bullish gold stock (if not necessarily the metal itself) fundamental scenario.
I don't want to come off like some kind of wise guy know it all here, but what I do know is that there are a lot of moving parts to good analysis and you cannot simply go by nominal extrapolations like 'if GDX fails, then deflation is indicated'. The reason that the gold stock sector is distinguishing itself is due to its counter-cyclicality. End of subject. Do you see oil, industrial metals or commodity currencies looking bullish? I didn't think so. They are generally rebounding with the broad markets, and that's about it.
The gold stock sector depends on the counter-cycle for its unique aspects to eventually become apparent. During inflationary bouts, the gold stocks often should and do become also-rans compared to commodities of positive economic correlation.
The quotes above are representative of the way the majority views the inflation/deflation debate with respect to the gold stock sector, and so it is not as though they are being singled out. Many otherwise quality websites and analysis sources believe similar things. But outstanding opportunity (to make incredible gains and also to preserve capital) do not come to the majority. They come to people who do the work to get outside the 'misperceptions game'.