[edit] take the RRG as a novelty. I think I just took the relative strength of a relative chart. Sorry about that. I just realized that RRG automatically measures any nominal market against SPX. In that, HUI’s relative performance is not as good. I thought that the indicator produced the relative ‘SPX’ because that was the market I was measuring HUI by.
The ratio still does sport its positive divergences by RSI and MACD and comp to last year is still valid. As I said, lower priority. I would like to use it more going forward when producing nominal charts.
A lower priority update to show that while HUI has no notable divergence nominally, its ratio to SPX does have some positive divergence by RSI and MACD.
The reason it is low priority is because something similar happened a year ago and while the ratio rallied nicely after that it ultimately failed to a new low last December. So that’s the caveat. People trying to manage the precious metals using only charts are misguided. There’s much more to the story (sentiment and fundamentals).
Undaunted however, I present to you the ratio chart as it is worth considering. I’ve added the ‘RRG’ indicator at the bottom, which is an indicator that measures relative performance (RS-ratio) and momentum (RS-mom). RS-mom measures the momentum of the RS-ratio and it is heading in the right direction. Even if it’s not THE bottom it sure does not hurt the case that the miners could out-perform in the near-term, if not longer-term.
Notice how last September the ratio’s ‘price’ dumped to a new low before whipsawing back upward to a rally. This sort of rhymes with what we’ve been discussing lately about the 2016 dump and reversal. That was in nominal HUI, but the same could apply here. At least in gold stocks relative to broad stocks, which have a much worse general risk/reward proposition in my opinion.
Again, lower priority but here it is for your consideration.
