To be sure, the ratio is not infallible. In August, the GDXJ/GDX appeared to be sporting encouraging traits, but a month later GDX and GDXJ had declined by an average of 15.5%.
“In my humble opinion the first potential bullish building block would be a rally in the ratio, breaking above the steep falling channel it has created over the past few months. Stay tuned, this could be fun for this hard hit sector if certain things fall into place,” said Kimble.
GDXJ/GDX Ratio Chart
Chart Courtesy: Kimble Charting Solutions