Here is the weekly chart we have been using for the last few weeks.
As you can see Huey is approaching the ‘neckline’ resistance to our projected bottoming pattern. As this morning’s update pointed out, it is doing so on blistering (panicked?) bullish sentiment. We should remember that sentiment is just one tool and also that it was pinned at ZERO for months (a supposed bullish contrary indicator) while the index declined relentlessly.
All good and all as projected.
But I for one did not suddenly become a genius over the last two weeks. What I did was buy yet another ‘potential’ bottom that is turning into a real bottom. The rest, which has been coming in the form of paper profits, is unlike any two week stint I can remember.
HUI is coming to the 280 resistance level. I am going to raise cash by doing some minor selling. But this is done as a swing trader on something that I think is making a real bottoming statement and beyond the short term is really only just getting started. So I’ll take some profits and hedge at just under the 280 resistance level. I don’t want to be a pig.
What I also want to do – and indeed have done over the last couple of sharp, fast reactions – is add to or establish positions. This post is just a reminder that while we are validated as geniuses right now we really are not; and also to note that if you worked hard for profits that are popping hard and fast now, it is legal to take some of them.
This is just how I see it and go about it for my personal needs. Day traders are probably out now and investors are probably just waiting to add to positions on downside reactions. Investors are also advised to tune out noisy posts geared toward trading.