For those involved in gold stocks... The HUI correction continues to look normal. The gap has not filled yet and if it does and 195 is maintained, the index will…
The US economy is relatively strong and short rates are rising harder than long rates. This implies a continued ‘risk on’ environment. This is theoretically bad for gold but generally precious metals miners still remain constructive, technically, for a rally at least and a major bottom at best.
This morning, the ADP employment data was unsurprisingly strong at 238,000. Later today we have Fed minutes and on Friday the Employment report. (more…)
HUI is either dropping to fill a gap (not a bad thing) today or testing short term moving averages for support.
What Has Been
A solid 2.5 years of risk management (to varying degrees) has been required of precious metals investors. It was most intensely required after the announcement of QE3, when the net commercial short position in silver began a relentless march toward a very bearish alignment in late 2012 and then the HUI Gold Bugs index lost an important support level at around 460. Here is the chart of silver with a heavy commercial net short position from NFTRH 215, dated 12.2.12:
For anyone interested (and I continue to harp on the idea that most probably should not be, since NFTRH is a macro market manager, not a day trader service), here is a look at a couple of markets on which I have taken bearish positions.
Earlier in the week we noted the hard down and reversal in the precious metals as an indication to keep an interested eye on. We also noted that we’d want to see Thursday and Friday follow-on, preferably on volume. Yesterday added to the bull case as follows: