There has been a lot of buzz in the gold community lately telling people to ignore TA; about how it will not work for you this time. My only answer is that it has worked for months upon months and I wonder how the sector’s top gurus know it has stopped working or will stop working.
HUI is below 275. If this holds up, a safety parameter is broken. I remain in “Huey, you prove yourself to me, not the other way around” mode. This potential setup has only been to a possible counter (bear) trend rally, as the bigger picture weekly view from this week’s letter makes clear.
Gold stocks are not gold (or silver). i.e. they are certificates of public entities run by people of various skill and ethical makeup in sometimes questionable political climates; and they are speculations. We certainly do not owe these entities anything. They owe us.
Even in the metals, where the gold sector gurus tell us that TA will not work, a downward pull today is in keeping with technically broken prices (gold below 1524, silver below 26.10). You know my views on gold; it is honest monetary value. But a large part of the investing world are patrons at the black jack table. To the extent that you care about price, respect the negative technical situation until it is negated.
So TA may not work according to the sector’s most learned and vocal advocates. But it is a tool and it will help people who use it to be in position to effectively be better bulls when the time is right, in my opinion.