A little reminder for those interested in the sector (and I know you’re out there aplenty) that our first major parameter for the rally is the resistance beginning at HUI 195, which is almost at hand. Here is the way too noisy chart telling the story. :-)
Chart jockeys were sent out (or to the short side) when HUI lost support at 185. At that time we noted that the final puke may have been in progress. RSI became oversold enough to spur a rally, gold and silver CoT became favorable and the rest is history; a rally to the 195-200 resistance zone was on.
If HUI hits the initial target of 195 it will have been a quick 20 points off the low. There could be more rally after that, especially if CoT remains favorable and the US dollar continues to weaken and breaks down from its bearish pattern. But this would be a logical point to expect a pullback. Today it pulled back a bit and found support at the green dotted line, which has been a support and resistance point several times in 2017.
So I think the majority of the 1st leg up is in and at 195 it would be time to expect a pullback. If at any time Huey loses the 190 level a test of support at 185 would be likely. That could be a healthy shakeout of about 50% of the rally. But this is an opportunity for traders to take profits and buy the dippers to have patience (i.e. not buy until a decent pullback). I have sold nothing but stopped buying shortly after the bottom and am going to let coming data points for this and other markets determine my course.
This update simply wants to point out to you that the lower bound of the target zone (195) is very close at hand.