As I continue to ruminate about this gold correction, I ask myself a couple of questions: What happens to silver in this kind of a correction? What happens to gold stocks. I'm going to try to update the previous set of charts to address these questions.
In the charts that follow the light blue boxes show a reasonable exit (based on a gold RSI 50 downward crossing after having made some real money, preferably having the RSI touched or crossed 70). The use of the $SILVER:$GOLD and GDX:$GOLD ratios shows the relative performance of silver and gold stocks over that period.
Surprisingly, Silver does as well or better than gold every time. Guess I'll find a leveraged silver play (e.g. SI options or perhaps SLW options). Got any other pure (or nearly pure) leveraged silver plays? On the other hand, gold stocks underperformed gold coming out of these corrections 3 of 5 times and only out-performed gold once. Guess I'll try to lay off with restoring my gold miner positions, at least until I find some new names I really like.
P.S., Its probably worth looking at the run up to these gold tops in terms of the GDX:$GOLD ratio as it seems to me that a falling ratio is an indication that at top is nearby.