Obviously not all gold stocks will follow HUI. Some of the smaller ones are and have been going their own way. I am using HUI as a general guide for the gold stock sector with respect to when the bias toward selling pressure may end.
[edit 2] I neglected to note in this update the less favored downside target at somewhere around 170 +/-, which would be a test of the 2020 crash lows. It is not favored, but still in play as the measurement from what may be an H&S structure on the weekly chart.
To review, if I am correct about a coming higher low in the 2+ year old uptrend in the HUI/SPX ratio, an opportunity is being presented to buy this sector that has been kicked to the curb during the speculative frenzy the Fed has created with its easy money.
And here we go. The 260 area is finally being approached as Huey ticks a lower low today. The yellow shaded circle shows the intersection of the downtrend channel’s lower line, the top of a lateral support zone (top of the 2020 crash pattern) and the 50% Fib retrace. That is a logical buy area.
However… let’s be aware that this is the gold sector and its corrections tend to climax with fireworks, not whimpers. A final capitulation could possibly drive HUI briefly below the support zone and there sits the 62% Fib around 230 in the event of a more extreme climax.
Anecdotally, when the gold bugs go into the ritualistic puke mode and loudly blame everyone but themselves it would be time to buy, if the downside targets are hit while that is happening.