Gold(en) cross

The barbarous relic has been lagging most other markets for months, but gold bugs finally have a little reason to cheer, or so it seems. For the first time in more than 50 sessions, the metal is set to close above its 50-day average, triggering a pretty decent looking bottoming pattern for those who pay attention to charts.

The biggest issue is that gold hasn't responded very well to improving conditions like this. It can be a trendy market, and the fact that it held below its 50-day average for so long suggests that sellers have been fairly aggressive. And they haven't let up so easily in the past.

The last signal was an excellent sign for buyers as it was at the start of a long-term recovery. The last signal in a cluster usually is. The problem is that most of the signals failed, and usually quickly.

There was a +0.38 correlation (on a scale of -1.0 to +1.0) between gold's return 1 week later and its return 6 months later. This gives us a bit of a hint that if buyers come in quickly after this recovery, then gold has a better probability of adding to those gains in the months ahead.

These crosses above the 50-day in gold weren't that great of a sign for gold mining stocks, either. The 1-week to 6-month correlation for miners was +0.26, so a bit weaker but still positive.