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Good news for stocks and gold - Lithium traders are depressed

Jay Kaeppel
2026-07-22
Some market relationships cannot be explained - and are therefore understandably dismissed by many individuals. But under the category of "opportunity is where you find it," consider the curious - and heretofore highly useful - relationship between trader sentiment on Lithium (Yes, Lithium) and gold and stocks, and decide for yourself.

Key points:

  • Not every favorable signal from every indicator qualifies as an automatic "Buy" signal
  • Many indicator signals merely provide weight of the evidence, and some qualify more as "continuation" signals, which alert investors that a particular trend is likely to persist; The more indicators that generate signals within a given period, the more favorable the outlook
  • One curious case is that of trader sentiment regarding trader sentiment on the Global X Lithium & Battery Tech ETF (LIT) and its inexplicable correlation to gold and stocks

The curious case of LIT Optix

For many markets and ETFs, we track our "Optix" indicator. For background, per our website:

The Optimism Index (Optix) for ETFs is based on data including:

  • Trading activity in put options versus call options
  • Future volatility expectations
  • Average discount of the fund to its NAV
  • Price behavior

Each measure is ranked against its historical norms to determine whether or not the current level is at an extreme, then totaled to come up with an overall score. The Optix can go from 0 (maximum pessimism) to 100 (maximum optimism), though it generally stays above 20 and below 80.

In a nutshell, high readings suggest "too much optimism" and low readings suggest "too much bearishness" am

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