Goldcorp, Gold Mining Sector Surges

Gold comex has made a strong surge from its lows in mid September, but the mining sector has not followed the metal.  Instead mining stocks have followed the main markets to the downside.  Today we saw a reversal, the Gold Bugs index surged 19% as the rest of the market was making new lows.  There seems to be no end to this selloff despite unpresedented market interventions.

The pundits claim there is a liquidity crisis, but this is simply not true.  It is a confidence, and trust issue.  There is an incredible amount of money that is on the sidelines right now but they are not interested in owning housing related debt products because there is no value in that sector.  Besides the regulators have been changing the rules the entire way down, why would anyone be looking to invest in the financial sector?  Only taxpayer dollars could foolishly be wasted on this.  Intelligent investors ARE looking for a safe longterm investment, and I think they are seeing value in the gold sector.

Here is the HUI index which is showing bullish divergence on the MACD.

Here is a 10 minute chart of GG, showing where I entered today.  It has overlays set according to The Guppy Multiple Moving Averages.  Here is a good article that discusses how these overlays can be used to identify a developing trend.