Advertise | Bookmark | Contact Us | E-Mail List |  | Update Page | 

Commentary : Gold Review : Markets : News Wire : Quotes : Silver : Stocks - Main Page >> News >> Story  Disclaimer 
Latest Headlines

GoldSeek Radio: Gerald Celente and Wolf Richter, and Chris Waltzek

SWOT Analysis: Tightened Supplies Could Be Good for Copper
By: Frank Holmes

Technical Scoop - Weekend Update Mar 19
By: David Chapman

The Wealth Machine That Rising Interest Rates Create And The Conflict With The National Debt (Part 2)
By: Daniel R. Amerman, CFA

Standing Ready to Lease Gold
By: Keith Weiner

Is The U.S. Economy Really Growing?
By: Peter Cook, CFA

Pro-govt. Turkish paper reprints Manly's RT exposure of gold price suppression
By: Chris Powell

Yet Another Chart That Screams ďLook Out!Ē
By: John Rubino

Bonds, Inflation And Amigos
By: Gary Tanashian

SIC Perspectives
By: John Mauldin


GoldSeek Web

The Light at the End of the HUI

 -- Published: Wednesday, 28 February 2018 | Print  | Disqus 

By Rambus

Iím going to use this long term weekly chart for the HUI as a proxy for the other PM stock indexes. This chart also shows you why Iíve remained very cautious on any PM stock rally.

What we know for sure is that the HUI rallied strongly out of its January 2016 low to the August 2016 high which was very impressive. At the time it looked like the initial impulse move in a brand new bull market which was a welcomed sight after 5 years of bear market price action. At the 2016 top is where we should have expected some type of consolidation pattern to start building out to consolidate that massive gain, but what we got is not what we wanted to see.

I remember taking some flack from several newsletter writers when I posted a possible H&S top in place. I was told that everyone and their brother could see that H&S top so it would fail, the new bull market was born and that was that. From my perspective that H&S top formed exactly where one would expect to see a reversal pattern form which is at the end of a big move. If the bull market was truly underway the HUI should have started to chop sideways creating a consolidation pattern instead of a reversal pattern.

After the neckline gave way there was a 5 week backtest to the underside of the neckline that confirmed for me the H&S top was valid and correct. After the backtest was complete the first impulse leg down took about 8 weeks to complete. That low is marked by reversal point #1 at the beginning of our current triangle trading range. Note how the neckline also held resistance on the second backtest at reversal point #2 again adding more confirmation the neckline was hot and to be respected.

Another thing we know for sure is that the HUI has been chopping sideways for over a year now consolidating that first impulse leg down. The markets usually donít make it easy to see the real picture until well after the fact. As you can see our current one year triangle had a false breakout below the bottom rail and then a rally back into the triangle which at the time negated the breakout to the downside. Discipline dictates that you have to respect the fact that when the price action closed back inside the triangle that we had a false breakout and to start looking at the top rail for resistance.

We have looked at many triangle patterns in the past that morphed into a bigger triangle. The red circles show how our current triangle has morphed into a slightly larger triangle. Sometimes we see a symmetry false breakout of the top and bottom rails which are about the same amount. On the HUI we have a symmetry false breakout below the bottom rail with the counter trend rally failing to make it all the way up to the top rail of the triangle trading range. If you take the false symmetry red circle below the bottom rail and added it to the failed rally high you will see a complete reversal which we could be label as a 5th and 6th reversal point.

After the failed rally attempt back inside the triangle the HUI declined once again closing below the bottom rail which puts the triangle back into the consolidation pattern to the downside category. The first thing Iíll be looking for is for the HUI to make a lower low for confirmation the impulse move down is in progress.

I have two price objectives based on two different measuring techniques I use. The first one is the breakout to breakout method which would give us a price objective down to the  135 area. The impulse method gives us a price objective down to the 124 area. So far our current impulse leg down is only about 2 weeks in the making. If we are truly beginning the next impulse leg down it should be fast a furious into the price objectives.

I know this isnít what most of you want to hear, but this is what the charts are strongly suggesting. If Iíve said this once Iíve said it a million times, ďthe only rule in the stock market is that there are no rules.Ē

In a perfect Chartology world a decline down to the bottom rail of the major uptrend channel, around the 120 area, would be just what the doctor ordered. That type of move would shake out all the weak hands and lay the groundwork for the resumption of the secular bull market that began in 2000. After nearly seven years of bear market price action we may now be witnessing the light at the end of the tunnel.


| Digg This Article
 -- Published: Wednesday, 28 February 2018 | E-Mail  | Print  | Source:

comments powered by Disqus


Increase Text SizeDecrease Text SizeE-mail Link of Current PagePrinter Friendly PageReturn to >> Story

E-mail Page  | Print  | Disclaimer 

© 1995 - 2017 Supports

©, Gold Seek LLC

The content on this site is protected by U.S. and international copyright laws and is the property of and/or the providers of the content under license. By "content" we mean any information, mode of expression, or other materials and services found on This includes editorials, news, our writings, graphics, and any and all other features found on the site. Please contact us for any further information.

Live GoldSeek Visitor Map | Disclaimer

The views contained here may not represent the views of, its affiliates or advertisers. makes no representation, warranty or guarantee as to the accuracy or completeness of the information (including news, editorials, prices, statistics, analyses and the like) provided through its service. Any copying, reproduction and/or redistribution of any of the documents, data, content or materials contained on or within this website, without the express written consent of, is strictly prohibited. In no event shall or its affiliates be liable to any person for any decision made or action taken in reliance upon the information provided herein.