The previous update covered the short-term situation, using GDX. This update will cover HUI daily, weekly and monthly charts as a reminder to our goals for this rally.
First, HUI daily reset itself from overbought and today appears to be the definitive indication that it’s going for a new high on the move, perhaps to our next milestone at 330.
Before getting to the weekly and monthly charts, let’s note that Huey is still traveling with his preferred macro-fundamental condition, fading inflation. The Gold/RINF ratio is again positively diverging and HUI is taking note.
HUI weekly shows the 330 objective and more importantly, the 375 objective.
HUI monthly is just the sexiest thing I know of these days. But then again, I probably need to get out more.
We closed August in channel breakout mode and you can bet that the machines took note. While remaining tempered with a rally objective to simply make a higher high to 373, this chart brings on thoughts of 500 (+/-) because the energy built up during a 4 year long downward correction could be quite powerful. Why not 500 if the markets remain juiced on Fed speculation into a blow off scenario?
With the macro picture improving each week I don’t see why the gold mining sector cannot continue to lead the broad party.
Finally, the HUI/Gold ratio – intact throughout the recent sector pullback – is looking for a new upward move after pulling back hard within the uptrend that began in March. This would be a supportive internal, if it continues to trend upward.
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