More Sentiment Indicators Signal Extreme Pessimism

One of the three sentiment indicators was profiled in an entry here yesterday, but Adam of "Before It's News" has gotten ahold of two others. The first is the 10-day moving average of the Daily Sentiment Index, and the last is the put-call ratio for the Market Vectors Gold Mining Index ETF (GDX.) Both show, or have recently shown, sentiment that's very bearish. Hence, Adam concludes, the gold market's likely to go up.


Given that gold's leapt up to a new daily high of $1,118.50 as of just before 9:30 AM ET, the timing was fortuitous...even if it was webbed before the IMF open-market-sale announcement. The fact that this bit of news was shrugged off, as well as the second phase of reserve-ratio tightening by the People's Bank of China earlier, augurs well for the metal. (So has the recent plummet of the U.S. Dollar Index, from about 80.65 as of an hour ago to 80.22 now.)