NFTRH; Precious Metals

Silver is continuing its breakout on the weekly chart (ref. the comparison to the CCI index in 2013).  Silver vs. gold is continuing upward (a good sector leadership indication) but is getting very over bought now (traders be aware).  Gold is breaking through its 50 and 200 day moving averages and approaching the key ’round number’ resistance around 1300 that we have been noting.

HUI is now breaking above the weekly moving average congestion and above the key 230 level we have also been noting.  The bottoming pattern remains a good one although the right side is getting a little sharp as the sector becomes over bought.

hui.weekly

I think that considering HUI held the ‘205’ parameter so perfectly, the idea that technicals may lead fundamentals (not near fully engaged with a strong economy, current Treasury yield structures and gold/commodities ratios) is worthy of much respect.

hui.daily

As Huey gaps up here toward over bought territory it is important to maintain discipline.  It is important to a) not chase momentum, and b) think about taking some profits if you are a trader.  Reactions are sure to come at certain points.

Those are short term considerations.  Longer term, especially if silver maintains its fledgling breakout, it appears the big bottom pattern (HUI) we have nursed since last summer is asserting itself.  More to come this weekend after the dust (no pun intended) settles.