As we have been noting, the daily chart of HUI has a target of 168, which would be a theoretical Head on an Inverted H&S. Note the word theoretical, because the weekly chart still holds the nasty 100(ish) target from the 2010 – 2012 topping pattern and now a new one based on today’s lower low to the June low, which is to around 130.
So the idea of this update is to a) note that the IHS bottoming scenario has taken control over the ‘W’, but also to bring back the measurement from the massive long term pattern because in keeping with the theme of manic momentum (in this case downward), you want to be strong if and when things really lose control in a final capitulation.
It is easy to talk about capitulation, but it tends to feel different when it arrives. So try to project how rough things could get and plan accordingly. For those interested in this infernal sector, it could be a ridiculous opportunity, but it could happen fast if this is indeed a final capitulation coming into play.
