From the last update on Tuesday…
Indeed, I wonder if that was not a solid A-B-C correction. But HUI needs to take out resistance and the moving averages in order to prove that case.
Today it smashed through resistance, tested the moving averages and reversed. That was always going to happen even if the bullish daily A-B-C correction view proves out. It’s all very normal.
But if it does not prove out and a more volatile near-term is in play we call on the weekly chart once again to define things. 175 to 180 is key support and if Huey does not break through current resistance in the near-term – something it is capable of doing, as the daily chart above is not overbought – it can still test that support because there is no real support between here and there. The gap down at 100? Unlikely now, but again these are the markets and they will decide, ultimately.
HUI is normal. It led broad markets into the bounce and was not going to clear the moving averages on the daily chart without some pullback and grind. Or put it this way, if it did and became overbought the risk would have increased along with price. This pullback appears healthy. But if the miners are going to pull back further (perhaps to lead a broad pullback?) we’d look to the 180 area support once again.
Speaking of the broad market, you may have noticed that I am giving at least equal weight to broad positions within the sectors identified as relatively constructive in NFTRH 595. Beyond the short-term and its potentials for volatility I am looking for an inflationary 2020, eventually. That would make the gold stocks one vehicle, but by no means do I plan to be a gold stock manager exclusively. They have “gold analysts” for that. As it looks now I think NFTRH is going to be a market analyst for an inflationary view upcoming after we clear the deflation scare, which has done its job in stellar fashion jerking out monetary and fiscal policy on steroids.