The Better Miners

I wanted to make a point, and the best way to do it is by way of this XME/GDX ratio chart.

As the chart illustrates, XME is relatively overvalued compared to GDX, and it tends to cycle over the long haul. I have therefore been strongly disposed, when I want to short miners, to short XME instead of GDX.

That served me well today. Here, for instance, is GDX, which has absolutely blasted higher today.

On the other hand, here is XME. I was already very profitably short this, and I got stopped out instantly at the open (still with a nice profit). However, I re-entered the short at a better price, and now I’ve got a 2nd handsome profit on the same symbol.