Folks, I am the guy who’s always talking about keeping noise levels down and frankly I have to tell you that I feel I did a poor job of that with the HUI Diamond cacophony. I don’t like making excuses but insert here the rationale that when writing millions of words over a decade+ there will be times when you just do not exercise your better judgement. That damn Diamond morphed so many times it proved a senseless exercise. My apology.
Now on to the business at hand, HUI is bouncing today. It and the ETFs (GDX & GDXJ) are in the same general situation. That is they remain in the downward flags and each has bumped up to the short-term marker, the daily EMA 20. Take out that moving average and we can get cooking on new upside potentials. Don’t take that out and we’re still in correction/consolidation city.
If the sector does resume the correction (i.e. this is not a bull flag) as noted previously the next support objective is the SMA 50 (which as noted in the TL Notes yesterday GDXJ already tested) and a small support shelf that coincides with it. Lateral support is at 300 (the combination of these is the 300-318 support area noted yesterday). Then comes more support – coinciding with the 38% Fib – in the 280s.
But a major buying opportunity, assuming the macro looks right at the time, could be a drop to the 50% Fib and the top of the bull pattern and/or the SMA 200 (257 and rising).
So enough fooling around with things like a Diamond pattern, with which to mentally whipsaw you. These are the levels to watch for, beginning with today’s attempt as the EMA 20.
