A very simple update on the gold sector. We have noted HUI support at 170 but also the 2016 secondary low at 160 as another support area. A hold or break of the green down sloped support line is the first thing to watch, then 160. If these fail, the index will measure to the 120s and a higher low to 2016’s major low.
As many of you I am sure know, the sector often terminates its corrections with events. So if these supports give way it would be a sign that an event – quite possibly the last of the post-2016 consolidation – is taking place. If it holds support Huey will probably take another shot upward in its seemingly interminable jigsaw pattern of rallies and declines.
Personally, I’d rather get it over with. But we’ll see what the market has to say.
Separately, the stock market appears to be remembering the ‘2nd leg down’ script. Let’s see if it follows through tomorrow. We noted some internal signs at decision points in an update the other day and I’ll try to update those in the morning. As noted in the update and Trade Log, I’ve been raising cash and even initiated a few more shorts.