The perfection is in the fact that one is getting brutalized by the optimism breaking out everywhere (Media serve up everything from vaccines to the presidential transition to the appointment of Janet Yellen as Treasury Secretary) and the other is factoring only the good news into its bullish optimism. It is perfect because if you’re a gold bull, you do not want to be running with cyclical market bulls and for gold stocks, which leverage the gold price, that goes double.
HUI’s leadership is diving within the post-2018 uptrend. That is perfect because the best time to buy in bull markets is during hard pullbacks within existing uptrends.
This morning ES and NQ are both positive again and gold is doing this. It is finally dropping to a viable support level at the SMA 200. We also have the mid-high 1700s on watch.
Silver is dropping further from the SMA 50 with the first key support area being where the 2016 high of 21.23 meets with the rising SMA 200. The mid-high 18s are also viable for silver.
The gold miners bullish percent index, a measure of breadth, is coming to a buy zone.
HUI/Gold ratio has dropped to a level that should support it if it is going to remain comfortably normal. But this is the volatile gold stock sector so we might also prepare for a higher low to the March crash low in the ratio.
Finally, another look at my messy daily chart of HUI. Huey is in the ‘best’ target area of 280 +/-. But with the brutality that a wildly bullish macro is inflicting on the precious metals, our other very viable level of 260 +/- should not only be respected, but in my case now, expected.
What I like about the current setup is that there is a good chance that when I cover my Euro and silver shorts gold stocks would stand as portfolio balance against whatever broad stocks I may decide to keep holding despite this raging over-bullish sentiment backdrop (as per NFTRH 630).