NFTRH+; reviewing the HUI big picture [w/ edit]

NFTRH 731 included daily charts of gold, silver and HUI. For the sake of perspective, let’s again review the monthly situation on the HUI Gold Bugs index.

Our operating thesis has been that a violently volatile bull market began in 2016 as evidenced by the drastic highs and lows since then that have not lost their series of higher highs and higher lows. That’s why the 2020 (preferred) and 2018 lows are so important to hold. As long as they hold, the down leg from the previous target (375) is completely normal to our bull thesis on the big picture.

Since bottoming (for a rally at least) in September HUI has comfortably held its higher low (black arrow). As we note some overbought sector readings on daily charts we also note a resistance area being approached now (230 to 240), which is close to a daily chart’s 200 day moving average (currently 241).

While a correction of some sort may result at or below these levels, the bigger picture advises that the plan remains on track, technically. The eventual target is and has been a considerable new high at 500 (+/-). We are tracking pullback buy opportunities on the daily miner/royalty charts and we’d want to also see the macro fundamentals proceeding in the right direction as well. If all that happens, it could be a rewarding ride to 500.

hui gold bugs index

[edit] Adding a log scale chart per request. Notice the intact trend line to all the lows since the 2000 low. This view would have us prefer that the recent low be the low prior to the next bull leg. As a side note, in the months or years it would take to hit the target at 500, the upper trend line may actually line up with 500, which would be nice confluence. This argues that we want to see the September, 2022 low be the ultimate low.


This Post Has One Comment

  1. Bart

    If the September lows hold, then 178 has basically held including some fake out (which are more rule these days than exception). I still think there are fair odds for a lower low, but it will look like a fake out on the monthly. The liquidity event is approaching. Money is moving from cash deposits into government bonds. Those pay more interest plus you transfer the risk from commercial banks to the government (for amounts higher than 250k outside FDIC). And this is deteriorating the capital ratio’s of the commercial banks.

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