Far be it from me to wave pom poms. But also far be it from me not to highlight bullish events on a sector that only we and a few crickets (and perma-bulls) seemed aware of back in November.
Yesterday’s update discussed the HUI/Gold Ratio (HGR). Here is how it closed yesterday. A new high for the intermediate trend.
And here is how HUI/GLD looks today, in-day as it tacks on an additional gain. In the previous update we noted that it was interesting that the HGR did not drop as far on the most recent pullback as it had during previous pullbacks along the post-September uptrend. We requested that HGR make a higher high and that is what it is doing now.
With all due respect to the volatility that will likely enter the picture as the miners get overbought and gold knocks on the door of the big macro gateway (1378 bear/bull long-term resistance area), the signal for a longer-term positive phase in the gold miners is positive if HGR holds this break above the SMA 200 and changes trend.
Also, when reviewing in the context of the big 2016 upturn in HUI/Gold, today’s grind is a healthier thing than the 2016 event that exploded out of nowhere and had everybody chasing with too much momentum. See the green dot as compared to today’s blue dot. Peoples’ nerves have been ground since the September low and that is where more sustainable moves come from.
While the above is not conclusive when viewing the post-2016 history of failed attempts, yesterday’s new high and some follow through today sure do not hurt the case of a potential trend change. More to come, as usual, when warranted.