There is talk of economic growth and ‘taper’ in the air and the precious metals are with that script this morning and declining. As reviewed in this week’s report, gold and silver were still below important resistance and today looks like they will go further below it if pre-market is any indication.
We also noted that the gold stocks had done the best work last week in getting above the 50 day moving averages and resistance. This must now act as support to keep the HUI okay. Here is the daily view.
The same zone that we had as resistance (206 to 211) should hold to keep things normal. The moving averages are clustered in there and this is very simply a clear line in the sand.
What Huey does from here is anyone’s guess. But we have a clear line of demarcation to work with. A drop and hold of this support area could be just the pause to refresh (and get rid of some of those 90% bulls we noted in this week’s sentiment graphic) the sector needs. But a failure and eventual loss of the higher low at the most recent green arrow would mean the short term daily uptrend has failed.