The Diamond has become a bit distorted but the important area now is its lower right quadrant. HUI has not dropped from the Diamond. I am almost hoping it will so I can further reduce non-core positions and await a buying opportunity. But it’s like watching paint dry and after today the sector’s sentiment profile (which is in need of cleaning periodically) is probably even better than the decent state we reviewed in NFTRH 617.
So it can continue to grind around, and maybe bounce to the upper right limit of the Diamond. But again, it would be good for Huey to just do something, anything to break the pattern.
They are pumping happy stories out there for the stock market, which appears to be a heat seeking missile toward its upside objectives (e.g. the Dow gap, SPX 3500, etc.) and today the COVID associated stuff got hammered while happy days are here again says the stock market. By the way, SPX and Dow left daily chart gaps today. In and of itself, bulls would not want those things there. But bullish is bullish until it is not. The stock market is rotating sectors like crazy and the counter-cyclical, defensive and COVID stuff is out lately.
Back to the miners, keep in mind that the gold miners are generally not happy days vehicles, they are for capitalizing on bad times. So if this Diamond consolidation breaks to the downside we may have a signal for a more extended correction. If it’s to the upside, no harm, no foul. But again, be aware that HUI could get a pretty good bounce to 350 or so and still not break the consolidation.
Personally, I’d probably get rid a few more non-core items, even though most of my portfolio draw down is from the likes of GBR.V, on which I already took all the profits I care to. I’d do that on a hearty bounce within the Diamond or a breakdown from it. Whenever it comes, I will not ride non-core stocks with the bugs scattering while the play is in for repairs (correction).