The last update, after noting a break below the first comfort zone by the HUI/Gold ratio and HUI’s further pullback potential, ended with this…
If HUI holds its normal zone of 220-225 then fine, we’ll re-bull. But it has not even tested it yet.
Okay Huey, good job so far. Yesterday’s low was 223.18, as the index dropped and then reversed upward from the ‘comfortable’ support zone while gold and silver dropped. A downside gap has been filled and HUI barely even tested the SMA 50 (221.71). Is that all there is? If that was it for the correction we can thank the up trending moving averages and larger bull cycle for the calm (relative to a bear trend or bear market correction). But even in a bull phase it usually does not go so smoothly in the gold sector.
Here is the HUI weekly chart that we reviewed in NFTRH 582. It’s bullish, with about the only thing I can find wrong with it being a negative divergence by RSI at the latest high. It barely touched the support zone which includes the weekly EMA 20 (218) and daily SMA 50 on the chart above. So again with respect to the latest short-term correction, was that all there is? We hit the preferred comfortable pullback area and reversed. We should know soon if that was it or not.
HUI/Gold ratio took back the December low that I had bemoaned it losing…
…before seeing this fully intact weekly chart as reviewed in NFTRH 585.
We have had reasons for caution (mostly having to do with sentiment, not TA) and yet the plucky gold (and silver) stock sector has hung in there in line with the still bullish technicals, as a thus far garden variety pullback to the preferred correction ‘comfort’ zone of 220-225 took place. The above is a snapshot saying it ain’t broke til it’s broke… and it ain’t broke. It’s intact.
I’ve been using the sector as a balance to broad market long positions and the bonus has been the still-intact and bullish status to this point. It’ll be telling to see how the sector finishes this week and in NFTRH 586 we will surely tell. But so far, so good.