Replies to post #6943 on Direxion Daily Gold Miners Be (DUST)

[Nightridertwou]

Here is a larger view of the dollar that seems many don't pay attention to and I believe is one of the reasons why certain sectors of the market are able to move strong on: http://static.viame.com/public_files/041116-scn/2016/04/11/bbd4f2fdfedcdcd55d4b38026567fbd0/041116-us-dollar-index-large.png The first layer of support at 93.8 was touched today, and so far has held up as a floor. The fact that we're even testing the support level, however, speaks volumes. The bigger line in the sand is still 93.3, and we've seen both of these floors reverse several downtrends in the recent past. One of these times, though, they're not going to be able to do so. Instead, they're going to fail, let the U.S. Dollar Index break below 93.3, and unleash a technical selloff. It wouldn't be crazy to prepare for that possibility now.

[Sgreg]

Here is why in my view.

Start of January miners are very over-sold at that time. Technical bounce very warranted and justified. Miners went up in January and it was absolutely justified.

In February gold was on a run and miners continued up and this was justified although miners got a bit overextended but nothing crazy yet.

March, gold basically flat for the month and miners not over-sold at all anymore however momentum carried them on. Movement starting to get silly.

April, gold still basically flat since March 10th. Miners now parabolic. Extremely over-priced and over-bought. Momentum has matured into a full blown pump job.

I look around and analysts are recently upgrading miners. Great of them to do. Where were they in January? Nope they wait until miners have gone up 150% in 3 months. Articles and media all over the place pumping miners now. Everyone loves the mining sector now that it is up 150% in 3 months. Bad balance sheets, huge debt burdens, gold being flat over the last month, Huge valuations of 60-80 times earnings, parabolic chart move. All ignored right now because a pump job is happening. What was justifiable in January and February and then turned a little too optimistic in March has now become a full blown pump job IMO.

This by the way is very normal in the stock market. All sectors do this from time to time. From one extreme to the other.