This chart shows HUI dropping through the 205 parameter today. While it is technically at support (and getting sufficiently over sold) as you know, without fundamental incentive, I am not near the view I had in Q4 2008 (buy!). No way, no how. Not without a fundamental case that is engaged and measurable. This update then is simply a technical status check on HUI for those interested.
Right about now the pattern guys should be schooling people about the brutal target of 170 on the pattern that is taking shape. That is of course very doable if this thing gets out of control, but to the left is a similar pattern with an even lower target that failed to actuate.
Now, if you want another negative, it is the thought that most of the bottoming rally out of December may have been related to the Ukraine disturbance (AKA hype) and maybe this latest pattern wants to attend to unfinished business (hype disposal).
Another negative is the HUI-Gold ratio (HUI-GLD). It has lower to go if the measurement on this chart is a good one.
On the plus side, here is a continuing positive as silver refuses to get more bearish than gold again today.
Bottom Line
There is enough negative information above to argue for a continued cautious stance if not a flat out ‘avoid’. Again, those who have known me for years know that I am an enthusiastic bottom feeder. That is my comfort zone as a trader. But I simply must have fundamental reasoning and/or cross market indicators backing me up. Those are not in play at this moment outside of the silver-gold ratio.
As always, we’ll update whatever we see and I do mean we. I am always receptive to subscribers’ input and their items of analysis that I may not be looking at.
