NFTRH Update; HUI 30 Min, Daily Chart Analysis and Market Notes

It is debatable as to whether the sector has bottomed but what does not seem debatable is that there is so much less risk baked in now than there was a week ago and especially, a couple of months ago.  If we were going to note poor risk vs. reward then we are going to note good and improving risk vs. reward now.

Anyway, moving on to a day trader’s view of the market (30 min. chart), we find that HUI gapped up on some ‘jobs not as strong as we thought!’ euphoria.  It is not a bad thing that this gap was closed on an ensuing drop.  Of course this morning’s gap up closed a gap down from a couple days ago.  Funny how these things go.

The first step to a renewed rally would be for Huey to get above the 30 min. EMA 20.  But let’s not micro manage to a day trader’s degree.  It is just noted for reference.

hui 30 minute chart

The situation has not changed in the least.  Huey is over sold but not to the low end of the 180-200 target range and also not over sold to a major degree by RSI.  It is just about over sold to the level of the first drop in late August, early September and is a candidate to bottom for a bounce at least, at any time.  But if we are talking about a ‘C’ leg down to complete the correction, it could become extremely over sold as well.

hui daily chart

I don’t like the look of the overall market either, and if it stays on the existing theme it would drop to major support before we evaluate bullish (preferred because it is the trend) or bearish, thereafter.  The other thing is that the gold sector often leads the broad market.  Simply recall back to January of 2016… who led the entire 2016 relief rally?  Yup, gold.  It bottomed and turned up first.

Bottom line?  Greatly reduced risk in the gold sector and not so in the broad US stock market.

See you on Sunday with much to say I think.