Gold Ready To Shine…Stocks Should Decline

In my opinion GDX and the precious metals look ready to rally nicely in the coming 7-8 weeks. I have been negative on the PM’s and miners for quite some time now. Keep in mind that I believe that the coming rally will be counter trend, but substantial enough to make money. I personally like the 3X ETF NUGT, which I believe could move up over 90% in the coming weeks. My current target for GDX is around 27.00.

After this coming rally, I believe we could see around 14 on GDX by early February next year, which should set us up for a strong rally next year into the summer.

On the other hand the stock market looks especially vulnerable to a dip over the next week and a half, in my opinion with a target of around 2743-50 SPX by August 23^rd. I think that new highs are directly ahead into my target date of Sept 11 from any late month selling, but that new high will likely be sold hard into the end of September.

The NASDAQ looks especially vulnerable to selling this month as the overvalued FANG stocks will likely get roasted. Any buying in this group will likely be met by selling going forward by those money managers who are reallocating into value oriented shares, which have missed the lion share of the recent move up.

We are late in the cycle, but the 3 year low due early next year should propel the stock market and mining shares higher next year. Gold is due to bottom 7 to 8 years out from the December 2015 bottom. This means a low due around late 2022-23. This deflationary cycle should drop gold price down under $1000 an ounce to as low as $700-$800 an ounce.

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