HUI has come to below 420 (419.30), which we noted as important support (the actual low in December was 418.74). It is time for HUI to reverse the bearishness or else the signals would open up for a test of the July low at 385.
Notice that the short-term momentum indicator CCI has been corrected from over bought to over sold, with MACD and RSI still decent. It is time Huey.
Interestingly enough, today’s drop comes with the speculative portfolio slightly in the green and I wonder if that indicates people are buying quality items here.
Regardless, HUI should not make a lower low and close the day that way or we must acknowledge that the technicals will have taken a hit with respect to this being a bottom. If that were to happen, the whole thing could reverse bullishly tomorrow, but we are not in the business of ‘ifs’, we are in the business of parameters, signals and risk management.
For reference, here is the big picture monthly chart of HUI-SPX, which really must get in gear as well.
The sentiment and technical backdrops state that the risk vs. reward is good for a pro precious metals stance over the broad market. But RvR’s can go on for a long while before resolving. Therefore, we need our parameters to start getting in gear to avoid more bearish near term possibilities.