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This ratio compares the NYSE Composite Index to the Junior miners ETF (GDXJ). When the ratio is moving higher the NYSE is reflecting relative strength to the small mining stocks. Over the last year the ratio has stayed with a uniform rising channel.
At this time the ratio is testing rising channel support and might have created a bearish head & shoulders topping pattern.
At this time we have to look at it this way…Support for this ratio is at hand!
If the ratio breaks below rising channel support the message should be…..bullish for mining stocks!