A Simple Strategy For Gold Stocks

Here is a quite simple strategy to play in the precious metals markets.
Assumptions:

• We play only GDXJ  - this is an ETF consisting of junior precious metals stocks
• There are only two positions: long GDXJ or short GDXJ
• a BUY signal is generated when GDXJ over-performs GDX (big precious metals producers) - then we have LONG positions
• the SELL signal is generated when GDXJ under-performs GDX - then we have SHORT position

Let us look at the chart below, which evidences this play:

Having played this strategy since August 2013 one could win 31.5 points (or $31.5 per one GDXJ share). This means a gain of 84%.
Presently there is a signal: go LONG GDXJ.