NFTRH+; Alternative View for Gold Stocks

The previous update simply talked about the daily charts of GDX and GDXJ. Straight up technicals.

Let’s put a couple wrinkles into the analysis.

First, with respect to the often shown (most recently in NFTRH 641) relationship between HUI and the Gold/SPX ratio we have noted that HUI remains elevated in relation to that macro fundamental/sentiment indicator, but using the 2003-2008 bull phase as a reference, HUI has tended to make spikes and failures during its long corrections. So even if HUI is not ready to make a big move to the next target of 500, a bounce can come at any time and said bounce could be strong enough to get the promoters into pump mode again.

The above is obviously speculation based on history and the current setup. But here is the case for a rally within the ongoing larger correction. Notice that the first 2 corrections (2002-2003 and 2004-2005) featured large pullbacks and large rallies within multi-month and nearly 2 year corrections, respectively.

So when considering the daily chart’s hold of the neckline thus far, the negative but constructive looking RSI and MACD and the shear duration of the correction, Huey could be ripe for a face ripper of a bounce within an ongoing correction, similar to late 2002 and 2004. It’s just an alternative for your consideration.

Sorry not to be pointed (providing options and alternatives instead of pretending I know what is ahead), but definitive statements are for wannabe gurus and promoters. I am just laying out possibilities to be prepared for. If this scenario were to play out that would allow us to forget about the gaps until a future leg down. As always, there are plenty of options and this is one of them for strong consideration.