Positive Divergence for Gold Miners?

The green demarcation circles on the upper chart identify a series of October-December lows in the SPDR S&P 500 (SPY) that were followed by a powerful up-leg that measured 34.78 points and amounted to a gain of 32.4%. The green circles on the lower chart of the Market Vectors Junior Gold Miners ETF (GDXJ) coincide with the same dates as the upper chart of the SPY, but shows something very curious indeed: During the same timeframe that the SPY gained 32.4%, the GDXJ lost over 12%!

But Tuesday when the SPY declined 1.7% (its fifth consecutive session), the GDXJ reversed to put in a daily upside reversal spike from amidst a positive momentum divergence. From a technical perspective, the GDXJ has put in a potential double-bottom low concurrent with a significant breakdown in the SPY, suggesting that money is beginning to flow into the ignored and beleaguered gold mining sector and will continue to do so, especially if fears of another crisis in the Eurozone and its potential global contagion trigger investor flight into hard assets.