A Buy Signal for Gold Stocks

[Inside Wall Street with Nomi Prins]( Maria’s Note: Maria Bonaventura here, senior managing editor of Rogue Economics. Regular readers know that editor Nomi Prins sees higher prices ahead for gold. But the gold sector has been hard to trade over the past year. The good news is, it’s from this sort of extreme pessimism that the best rallies develop… That’s the message from 40-year trading veteran Jeff Clark. Jeff believes we’re about to enter “one heck of a gold stock rally.” And in today’s guest essay, he shows you what all gold investors should be watching for in the days ahead. --------------------------------------------------------------- A Buy Signal for Gold Stocks By Jeff Clark, Editor, Jeff Clark’s Market Minute [Jeff Clark] The Bullish Percent Index for the gold sector (BPGDM) just triggered a buy signal. The BPGDM generates only one or two trading signals each year. The last buy signal we got back in October kicked off a three-month-long 25% rally in the gold sector. This current buy signal is set up to be just as powerful. Let me explain… The BPGDM measures the percentage of gold stocks that are trading in a bullish technical formation. It’s basically a gauge of overbought and oversold conditions. Since it’s measured as a percentage, a bullish percent index can only reach as high as 100% or fall as low as zero. Typically, a sector is extremely overbought when its bullish percent index rallies above 80%. It’s extremely oversold when it drops below 30%. Trading signals are generated when the index reaches extreme levels and then reverses. Take a look at this long-term chart of BPGDM… [Chart] The blue arrows on the chart point to the previous buy signals of the past four years. Here’s how the Gold Bugs Index (HUI) performed after all of those signals… [Chart] HUI gained 33% in four months following the buy signal in December 2021. It rallied 45% in four months after the October 2022 signal. The gold sector surged 25% in just one month following the signal last March. And, HUI gained 25% in three months after the BPGDM buy signal in October. Last Friday, the BPGDM triggered another buy signal. This time, it’s happening with the gold sector trading at its lowest relative value to the S&P 500 in over two decades. So, conditions are set for one heck of a gold stock rally. Of course, the gold sector has been hard to trade over the past year. We’ve seen lots of potentially bullish setups fail. That has led to lots of frustration among gold stock traders. And, it has created an extremely pessimistic atmosphere. But it is from this sort of extreme pessimism that the best rallies develop. I expect the gold sector will be much higher a few weeks from now than where it is today. Traders should look to buy gold stocks on any weakness in the days ahead. Best regards and good trading, [signature] Jeff Clark Editor, Jeff Clark’s Market Minute --------------------------------------------------------------- Like what you’re reading? Send your thoughts to [feedback@rogueeconomics.com](mailto:feedback@rogueeconomics.com?subject=RE: Inside Wall Street Feedback). MAILBAG Regular readers know the [nuclear energy revival]( is one of the biggest profit trends on Nomi’s radar for 2024 and beyond. But one reader is skeptical about the future of one type of nuclear reactor – small modular reactors (SMRs)… Having many SMRs in the U.S. is a pipe dream. Americans will never accept SMRs. The issue is the storage of spent fuel. The Yucca Mountain disposal site has been discussed since 1987. Where are the anti-nuclear activists? They are silent right now. But mark my word, they will be out in droves once an SMR site is proposed for their neighborhood. The NiMBY (not in my backyard) is alive and well. – Richard O. Would you welcome an SMR site near your neighborhood if it could help lower your power bill? Or is the SMR movement in America a “pipe dream,” as Richard believes? Write us at [feedback@rogueeconomics.com](mailto:feedback@rogueeconomics.com?subject=RE: Inside Wall Street Feedback). [Rogue Economincs]( Rogue Economics 55 NE 5th Avenue, Delray Beach, FL 33483 [www.rogueeconomics.com]( [Tweet]( [TWITTER]( To ensure our emails continue reaching your inbox, please [add our email address]( to your address book. This editorial email containing advertisements was sent to {EMAIL} because you subscribed to this service. To stop receiving these emails, click [here](. Rogue Economics welcomes your feedback and questions. But please note: The law prohibits us from giving personalized advice. To contact Customer Service, call toll free Domestic/International: 1-800-681-1765, Mon–Fri, 9am–7pm ET, or email us [here](mailto:memberservices@rogueeconomics.com). © 2024 Rogue Economics. All rights reserved. Any reproduction, copying, or redistribution of our content, in whole or in part, is prohibited without written permission from Rogue Economics. [Privacy Policy]( | [Terms of Use](