So a question has been, with regard to the sector on which I am fundamentally bullish, what if the market turns down hard? What happens to the gold stocks (and HUI's tenuous position above major support)?
I do not own any HUI components and indeed have done a lot of profit taking and risk managing on the explorers, and I want to see certain things happen in the macro before stepping up to the plate as an aggressive buyer.
If all things were equal, I'd be all over this from a bullish contrarian perspective. But the broad market's bad risk vs. reward profile has given me pause. Are the miners going to suddenly decouple from all of this? Well, to a degree they already have because the price activity has totally sucked relative to the SPX and other featured bull indices.
Anyway, without writing a book or turning this into something that should be reserved for NFTRH, here is an update of the gold-silver ratio correlated with the US dollar from a weekly perspective. USD of course tends to gain the bid along with T bonds when things go south. Make of it what you will. I know what I make of it and while I do not see the end of the world by any means, there is some wiggle room for some short term angst in the markets.
When this near term situation clears and defines its true nature, we just may clear the track for what 2012 will actually come to have been known for when viewed in the rear view mirror. We are not going to see policy makers blink with the stock market flying around up here and bulls feeling wonderful. The daily GSR posted yesterday gave me pause. This weekly one tells me that the analysis to date is on track beyond any expected short term disturbances that may generate.
Good stuff I say, because this is not easy by any means and the various herds are aligning on cue with their various ideologies and dogma the world over.