The chart below shows the Gold Miners Bullish Percentage Index (blue line), together with the price performance of the Market Vectors Gold Miners ETF (GDX) (orange line). The Gold Miners Bullish Percentage Index is currently reading 0%, a level last seen in December 2008 at the height of the global financial crisis.
A 5 year (daily) chart of the Gold Miners Bullish Percentage Index (Click on the chart for a larger version)
Chart courtesy of stockcharts.com
According to Stockcharts.com, “The Bullish Percent Index (BPI) is a breadth indicator based on the number of stocks on Point & Figure buy signals within an index… Because a stock is either on a P&F buy or sell signal, there is no ambiguity when it comes to P&F charts. This makes BPI a straightforward indicator with clearly defined signals.”
What this means is that right now not one of the 30 gold mining stocks in the NYSE Arca Gold Miners Index (GDM) is in an uptrend. This reflects extreme bearishness on the part of gold investors, something which typically marks a major market bottom.