Gold Stocks - Weakest Group Of The Day

Just the other day I wrote about how the gold stocks were overvalued relative to the S&P500 and that a correction was possible. Well today one of the weakest groups of the day were the gold stocks which closed down almost 4% but were down much more during the morning session.

The GDX  index traded as low as 48.10 before bouncing off the 50 day moving average to close at 49.45. In the lower panel is a ratio line which compares the gold stocks to the S&P500 and as you can see this line turned down indicating that these stocks over the past few days have been weaker than the S&P.

To read my post from the other day you can do so by clicking the following link.