The chart below looks at the relationship between the S&P 500 and Gold Bugs over the past 20 years. The ratio fell for nearly a decade as miners were much stronger than the S&P from 2001 until 2011. During the past 6 years, the opposite has been true, as the S&P 500 has been the place to be -- not the miners.
Is the trend about to change? Is a major topping pattern completed? Check out the ratio below.
The trend in the ratio has been up since the lows in 2011. A reversal pattern (bearish Head-and-Shoulders top) may be in play.
Premium Members bought GDXJ at (1) and also own RWM, forming a pair trade that's long junior miners and short junior stocks.
Could Gold Bugs (Miners) out perform the S&P for years to come? We shared this idea on 1/5/207.