Markets tend breathe between the extremes within cycles. A normalized gold stocks to gold ratio establishes the extremes. As I have written many times before, the invisible hand will “beat the grass to startle the snakes.” In other words, specific information is used to create biased response. For example, “oh my god what if I am wrong, get me out!” This classic fear response reinforces short-term selling. Intense and organized fear can produce fire sale prices for desirable assets. This is why the tactic of “beating the grass to startle the snakes” has existed for thousands of years.
There's an old trading saying, buy when there's blood in the streets. That’s easier said than done in this business.
Gold Miners Index to Gold Ratio:
Regards,
Eric
Hi Im Bartek from Poland, im 21 yrs old and I am a daily reader to your insights, on the Internet I came across : stockcharts.com
(Bullish Percent Index for the mining shares), I wonder what is your take on it. It presented an "overheat" in the 80s area [late April], and now with hitting the 30s it looks very bullish. Pardon me for my poor understanding of this subject. Even if you don't have the time to answer I am really grateful for all your knowledge you present on your site.Thank you so much.
Best regards
Bartek
