by David Kranzler
Investment Research Dynamics
The big rally in Q2 continued into Q3 until early August. At that point, all of the technical and sentiment indicators I monitor were registering levels which indicated that the speculative frenzy that developed in July had reached the point of “boiling over.” I see the decline in the sector that began in early August as a healthy “corrective” pullback that will set-up the next move higher.
The precious metals sector made a big run since mid-March, outperforming every asset class with the exception of a handful of insanely overvalued tech stocks. When a market makes a big run like we experienced in Q2, it’s not unusual to run into some interference while it consolidates and percolates for the next move higher.