Today HUI has attained a low of 224.68. Here is the daily chart…
The June gap is filled and the SMA 200 tested. As a bonus, people seem to be becoming pervasively bearish the sector. Those might be the ones that pumped Ukraine and Indian Wedding season as reasons to be bullish, throwing in the towel.
While I don’t love the fundamental backdrop still, we need to keep open the idea that technicals precede fundamentals and some fundamentals are constructive, with the Gold-Commodities ratio right out there in front.
This update is simply to state that if the sector is going to hold the bullish case (ref. weekly and monthly charts) then it needs to hold the 220-225 area to remain constructive. It is amazing how bad things feel when they go bearish, but this is what 225 would have felt like all along when we were coldly noting that level.
After hedging and taking evasive action earlier in the week, I have done some buying today. If one is interested in the sector, a buy at the equivalent of HUI 220 to 225 with a stop loss (to suit risk tolerance) below 220 could be the way to go.
Gold is hated and the US dollar is loved. I’ll be interested to catch the CoT report later today and also the Gold Optix (public opinion) this weekend. Also, GDXJ is green while GDX is red. That can’t hurt the case for a coming low and bounce at least.
See you Sunday with NFTRH 307.