Sentiment crunched again but it is approaching a supportive trend line

It had to happen eventually. Now the share prices of the leading gold producers are starting to capitulate. For many months their share prices defied the falling US$ gold price, probably because the A$ gold price was still good. These companies were amongst the best performers in the market for a long time but now, especially in the last two weeks, we are seeing breaches of uptrends.

It is not only the gold producers that came under pressure last week. A number of other leading mining stocks gave up their uptrends, pushing the Sentiment Oscillator Index even lower. Maybe they are playing catch up with the junior stocks, which have been in recess for quite a few months already. The wheels are not falling off on the economic front, but the mining sector is not attracting any new money. When the buyers go away it is inevitable that the share prices will fall.

But there may be good news just around the corner. The acceleration of the decline in the Sentiment Oscillator is quickly taking it down to a supportive trend line. The odds are that it will bounce off this line and the trend will turn positive. This could happen over the next month, with a bit of luck.
 

 WeeklyComm3August2018.pdf