With gold and silver positive in pre-market a bounce we had thought possible if not likely prior to a final capitulation could come about.
HUI (daily) has hit the upper support level defined by the top of the 2020 crash pattern, the 50% Fib retrace and the lower channel line. If a bounce materializes let’s note that resistance #1 is around 264. Until that is taken out there is not even a thought of calling correction over.
Resistance #2 is 275 and it is more clearly defined with several touch points in 2020 and 2021. The EMA 20 is dropping toward that area and that would be the first hint of calling an end to the correction. Then a better marker would be at the area where the SMA 50 is declining toward the red dashed neckline. Then the channel top and SMA 200.
Get the picture? It won’t be easy for would-be buyers to buy an incredible low (like 230 or even 170) and it won’t be easy for current holders to know when they can look at their screens again with confidence that the correction is ending. There is a lot of upside work to do for that.
Which is why I’d like a capitulation event that is so dramatic we’ll just know in our guts ‘this is it!’.
Last summer we had two targets: 280 +/- and 260 +/-. The first was hit and then a bounce/whipsaw ground everybody up before a new decline. Then last week the revised 2nd target (245-260) was stabbed. Excellent work Huey, and there was some pretty good downside volume in the larger miners, but I don’t think that was a capitulation. Of course, I could be wrong but the good thing about the next two resistance zones on the chart below is that they advise ‘bounce only’ unless/until they are taken out and held. Then it would not be ‘correction over’. It would simply be on to the next milestone at the neckline/SMA 50, and so on…