A quick snapshot of gold (futures), silver (futures), HUI and the gold and silver stock ETFs as they break to new highs (gold) break consolidation (silver) and potentially break the Cups’ Handles (HUI, GDX to a degree, GDXJ and SIL more clearly).
Gold is is threatening its cycle high today and again we ask, if this is all Coronavirus-instigated sentiment, why is the S&P 500 not a few hundred points lower? Trends are as they have been… bullish and if we are going to be pure TA robots, there is only one way to read this chart and it is bullish. Volume is building a bit.
Silver is breaking from a short-term downtrend channel and testing resistance. Volume appears to be gathering. Trends here are up as well.
HUI is making a strong push above the 50 day moving average. That could break the Cup’s handle. Huey would want follow through here and a couple days closing above the SMA 50. The implication of a successful handle break would be new highs and eventually a take-out of the 2016 high of 286.
GDX is not in as nice a Cup as HUI because its right side is not higher than its left side. But its move off of the SMA 50 appears more conclusive. Let’s see if volume and follow-through drive it out of the handle. Regardless, it’s a constructive looking picture.
GDXJ sports a clear view of a breaking handle. Volume has been waning of late (as it should on a bullish flag or handle consolidation) but if this move is real volume should come in soon.
The silver miner ETF is also clearly breaking a handle.
I don’t want to form too many conclusions as the pictures above are bullish and now time, volume and price will finish the story. But so far so good. Consolidation/corrections happen for a reason and that is to clean out a sector that has held its up trends in preparation for future upside. While we are not 100% conclusive, nobody above is overbought and working off overbought readings is also a job of a consolidation within a bull trend.