NFTRH Update, Technical Observations in the Precious Metals Today

HUI is either dropping to fill a gap (not a bad thing) today or testing short term moving averages for support.

hui

Quality silver miner and current holding AG dropped this morning, just about filled a gap and reversed back above the 50 day MA’s.

ag

Recently sold and likely future holding, royalty company RGLD dropped but is still above the MA 50’s.  If the correction lasts another day or two I’d expect it to at least test the 50’s, if not fill the gap.

rgld

Silver royalty SLW dropped to test the short term moving averages and stabilized as well.  It remains above the breakout line and grapples with the MA 50’s.

slw

HUI’s weekly view has improved with MACD triggering back up again to rejoin the TRIX, which did not trigger down.  This is a condition that indicates a bottoming process.  HUI is at a resistance point, so today’s corrective activity is logical.

hui.wk

That is the point, what is happening today looks normal and healthy.  A bottoming process is a grind and should keep people in doubt.  It may not feel like it on this individual day, but if the view that the stock market is on borrowed time (to go with the borrowed money that has supported it) is correct, then it may be good for the precious metals to be displaying an inverse characteristic as they are today.

Bottom Line

The HUI has not gotten above the 50 day moving averages, which are generally our next risk parameter.  But several quality precious metals stocks either have done so or are grappling with the 50’s.  Additionally, the HUI index appears to be in a bottoming stance.  Meanwhile, there are some gaps filling or to be filled.

In the bear market we have seen how all too often normal looking corrections (to fill gaps and such) can turn virulent.  So we should be on the lookout for that since the sector has not officially exited its bear market.  But one of these days a normal looking correction is going to be a healthy and normal correction or pause to refresh.

As of this moment, yield spreads like the 30-5 and 30-2 continue to look constructive to be making bottoms.  If they are, it would be likely that so too is gold.

I remain conservatively deployed, and have not added to positions other than a small addition to the AGI position.  But I am holding a comfortable amount of what I consider quality items.  I’ll let the market decide what I do from here.  I just wanted to present a quick snapshot of what I see going on.