NFTRH; Precious Metals Update

Silver continues to lead gold and that is generally a positive.  The ratio is sneaking above the MA 50’s, RSI is over 50 and AROON just went green.

sgr

Also note that HUI/GDX are thus far holding the ‘205’ and ’22’ parameters, respectively.

The upshot is that the bounce plan still seems to be a good one.  Also, sentiment has become worse (better on a contrarian view) with the most recent HGNSI (thanks Joe) at -30%, although extremes tend to be in the -40% to -60% area.  Gold newsletter writers are embattled and making bearish calls, which means their respective herds are not feeling bullish, which means they are generally where we would want them to be.

gdx.gld

The GDX-GLD ratio, unlike silver vs. gold, is RSI- and AROON red.  So this remains a negative until resistance is cleared and then the 50 and 200 day moving averages are dealt with.

If the sector does bounce we will manage it accordingly and continue to look for macro fundamental improvements, which have not yet become evident.  They may not lead the sector however, which is why nominal technicals are being followed.  For now, it remains a bounce only, but we should keep in mind that the ‘HUI 205’ parameter may have been a significant bottom per weekly charts.  It (+/-) continues to be a ‘stop loss’ on the bounce plan.