Watch These Two Indicators Before You Buy Gold Stocks

[Jeff Clark's Market Minute]( Watch These Two Indicators Before You Buy Gold Stocks By Jeff Clark, editor, Market Minute The [Bullish Percent Index]( for the gold sector (BPGDM) triggered a sell signal last Thursday. We [warned of this possibility one week ago]( when the BPGDM hit 100. It can’t get any higher than that. 100% of the stocks in the index were trading with [bullish]( technical patterns. That may seem like a good thing, at first. But, it’s really an indication of just how overbought the sector has become. And, when the BPGDM turns lower from an overbought condition, it generates a “sell” signal. And, that’s what happened on Thursday. Recommended Link [The World’s #1 Timed Stock Expert, Jeff Brown, Is Back Again…]( [image]( He’s identified hundreds of Timed Stocks… 100% of which, according to over a decade of multivariate backtests, soared up to 931%... 1,313%... 1,526%... or MORE… Starting the exact moment – down to the second – that their timer hit zero. And now, this man, Jeff Brown… who blew the lid off Timed Stocks back in January, has returned… This time, with his most urgent message yet. In short: Thanks to two seemingly unrelated forces… [Timed Stocks, are accelerating… in every way possible]( -- Of course, a sell signal doesn’t mean that gold stocks are headed for some sort of devastating decline right away. Previous signals have varied in their duration and their severity. But, it does mean that gold stocks are unlikely to rally much higher from here in the weeks ahead. Traders looking to add exposure to the gold sector will probably have a better chance to do so a month or two from now. And, for folks who may need a little more reason to be cautious on gold stocks, the GDX/Gold ratio is flashing a warning sign as well. We get this ratio by simply dividing the price of the VanEck Vectors Gold Miners Fund (GDX) – a market basket of gold stocks – by the price of gold. This ratio tells us how strong or weak gold stocks are relative to the metal. You see… action in gold stocks tends to lead the action in gold. If the GDX/Gold ratio is moving higher, it means gold stocks are stronger than the metal. That’s usually a good sign for the sector, and for the price of gold. If the ratio is moving lower, then gold stocks are weaker than the metal. That’s usually [bearish](. For the past several weeks, the gold stocks have been leading the price of the metal higher. Now though, it looks like that trend may be changing. Take a look… This ratio hit its highest level of the year last week, as the BPGDM hit 100. In other words, gold stocks were higher – relative to gold – than at any other time over the past year. The ratio turned lower last Thursday – just as the BPGDM generated a sell signal. The last time we got a BPGDM sell signal, along with a reversal in the GDX/Gold ratio, was in [mid-May](. The gold sector fell 13% over the next month. It’s reasonable to expect something similar this time as well. Best regards and good trading, Jeff Clark Reader Mailbag Have you been following the price of gold recently? If so, has tracking these indicators helped you trade the sector profit? Write us your thoughts – along with any trading questions you have – to feedback@jeffclarktrader.com. In Case You Missed It… [The Best Way to Play the Tech Boom]( One small corner of the tech boom recently returned extraordinary gains… And most investors missed out. RNC made 900% in 34 days… FVAN made 3,400%… And one company, GGI, made 9,400% in just over three years. A $15,000 investment in GGI would’ve turned into $1.4 million. While investors were picking over the scraps of the 5G boom… Or trying to decide between Amazon and Apple… They missed a key part of the tech boom. 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