Tag Archives: HUI

“Drop Dead Gorgeous”?

By Biiwii

As currently ‘risk OFF’ gold and silver prepare to get thrown out of the bull party (celebrating a bankrupt country’s pending agreement to play ball) once again…

au.ag

…we conjure some stuff that some in the gold “community” were considering last week.

For reasons of decorum I won’t name the source, but the following was written on a chart presented in the weekly free ‘analysis’ of a writer who has somehow managed to do two things all through the gold bear market; 1) remain bullish and 2) always sound authoritative and flat out right.  That is some trick.  Never have I seen a mistake admitted.

“GDX is sporting a drop-dead gorgeous bull wedge pattern.”

NFTRH 348 summed up wedge patterns thusly…

“This is a convenient opportunity for us to be reminded again that Wedges, either bullish
falling or bearish rising, are among the most hyped things in TA. And when they do
work out, they only have relevance for 1-3 days, assuming the chart is a daily like this
one.”

Here is the state of the “drop-dead gorgeous bull wedge pattern” at yesterday’s close.

gdx

NFTRH 348 continued:

Here are some facts…

• HUI lost the key support parameter of 160.

• HUI is below the 50 and 200 day moving averages.

• MACD and RSI are bearish.

• HUI broke out of the “drop dead gorgeous bull wedge pattern” and then soiled
itself the very next day.

• Key support levels now are the November and December lows, just as we noted
last week.

• HUI is bearish until proven bullish, technically. Not the other way around.

I am not trying to be like ‘hey look at me, a genius’.  I am trying to be like ‘hey, this was obvious and I have got to wonder who on earth is still taking the bait in the gold “community”‘.

When there is no more bait and when the fish stop biting, the precious metals will be ready.  I am not bearish gold or silver on a risk vs. reward basis given other factors coming into play, but as we have been noting all along certain indicators and macro fundamentals have just not registered yet.

The way the markets are going, that could change in a flash (today, next week, next month?), but you don’t sit out there spouting dogma with your capital on the line, waiting for the change.  You gather indicators, funda and technical data points and build your case.  The gold “community” may have to wait until the stock mania is fully expressed, again, whether that is today, next week, next month or…

We just don’t have answers, so it pays to just admit as much and do the work in an ongoing way without the need to provide easy answers every step of the way.

[edit]  Durable goods fall 1.8% in May, and gold gets hammered further.  But this is actually a positive to the real, long-term bullish scenario for gold.  The one that ignores cartoons about Indian Weddings, China Demand, strong US economy pushing up prices and sending institutions running for gold’s inflation hedge, etc. etc. etc.  We are of course talking about a counter-cyclical environment.

Gold Sector Weakness on Cue

By Biiwii

Fundamentally, the gold stock rally was labeled a “bounce only” because it was just another item rising anti-USD in an ‘inflation trade’ revival.  Right along with Oil, Copper and the outliers like REE, Lithium, Uranium, etc.

If we are disinterested in commodities (I am and have been), then we were cautious on the precious metals for this reason.

Like it or not, we are in a process of eliminating the inflationist gold bugs, and a lot of ‘inflation trade’ promoters while we’re at it.  I guess that is me being “sanctimonious” as one blog described me recently.  I prefer ‘overly judgmental’, but whatever.

Moving on, one indicator of the coming problem in the gold sector was the tried and true HUI-Gold ratio (HUI-GLD used here, while NFTRH used a very similar HUI-Gold chart to note the early caution signal on May 17).

hgr

Reacquainting w/ Mr. Fat Head; AKA HUI Monthly

In February of 2013 we noted the big fat HEAD on the HUI’s massive H&S pattern.  It was reviewed again in April of 2013 after it broke the neckline in a very bearish move.  Mr. Fat Head’s technical objective was and is 100.

Why is this being revisited?  Because I have gotten a couple emails noting that it is showing up again out there amidst the very bearish backdrop.  If anything, if every gold bug on the planet is planning for 100, the ingredient is in place for this final indignity that they are so well prepared for, to maybe not happen.

But a target is a target and it is there for a reason; namely that its source – Mr. Fat Head in this case – has not been eliminated from the picture.  Here he is updated…

hui.mo

There are other considerations…

Continue reading Reacquainting w/ Mr. Fat Head; AKA HUI Monthly

NFTRH; HUI Weekly Symmetry

With its position well below the ‘205 parameter’, I am not trying to look for positives because that was below our tolerance to begin with.  When the Ukraine hype failed as expected our targets were 220, 210 and finally 205 respectively to keep things in order.  They are all history.

Continue reading NFTRH; HUI Weekly Symmetry

NFTRH; Multi Market Update

Gold stocks are down again today and it is now decision time (for the sector if not individuals).  That is because the parameter is to not make and hold a new low to the May low on a closing basis.  We noted that a bounce is possible and if it is going to happen it should happen around here, at the May low with a similar over sold RSI.  Either that or it would be broken with a lower low (that does not reverse quickly).

Continue reading NFTRH; Multi Market Update

HUI Weekly Updated

Here’s the weekly HUI chart grappling with the key parameters we noted yeseterday.  Frankly, I don’t care which way it breaks * because I have been practicing what I have been preaching, which is patience, discipline and positioning for strength.

hui

* Well I do care insofar as some good people have gotten hurt by following some not so good peoples’ faulty analysis, but you get the point.

HUI: Mr. Green & Mr. Red

I want to show you the weekly chart of HUI that NFTRH has been using along with monthly and daily charts for much of the last year.  The dailies controlled the short-term and kept us aware (and out of harm’s way) that a breakdown was very possible, even likely, during the Ukraine noise over the summer.  The monthly gives other parameters that you can see if you click the Big Pic HUI, Au & Ag link above.

The weekly however, has guided NFTRH subscribers with Mr. Green and Mr. Red, otherwise known as the green uptrend channel and red downtrend channel.  Mr. Red scored a blow to Mr. Green’s gut when the sector rightfully dropped as the Ukraine hype wore off *, leaving it with little more than its incomplete (at best) fundamentals.  Now it is Mr. Green’s turn.  He needs to defend himself by defending the 205 to 210 zone.

Continue reading HUI: Mr. Green & Mr. Red

HUI to Target #1

NFTRH had a 220 to 225 measurement for many weeks.  Here is the updated chart from a public post last week, which showed the 220 area measured as a would-be target.  Well it would have been and it was.  Complicating matters, a new and logical downside target was illustrated this weekend that can be registered even if one assumes HUI is still in a potential big picture bottoming stance.  This came into play after Huey failed to get above a weekly trend line that we have been monitoring.

hui

HUI Daily Chart

So in speaking about those possible in-month jabs down below the neckline noted in the previous post, here is what I have been thinking (and writing about in NFTRH) since the geopolitical hype peaked out.  If support around 235 is lost Huey measures to around 220, which is the low end of the downside target we have had in operation for many weeks now.

There are worse things that could happen than filling a gap and scattering the wrong kind of gold bugs back out.  Then it would be up to the longer-term charts to do the heavy lifting if the daily does fulfill this downside potential.

hui

Gold Stocks Hang Tough

Here is the monthly view of HUI…

hui.mo

Here’s a blow up of the same chart…

hui.mo2

Never mind the Andrews Fork.  Those are goofy and subjective.  But the long-term trend line is still holding.  HUI can lose that line and stab down through it in-month.  But given the symmetry of the pattern, Huey will need to close September in bull mode.  That means no more monthly closes below the line.  Okay Huey?

HUI Timing Boxes

In the previous post about ‘Gold Miners & Inflation’ it was mentioned that the 2013-2014 would-be bottoming grind in HUI has been almost exactly the duration of the 2010-2011 topping grind.  Here is a visual to put with that statement.

hui

The current yellow box is an exact duplicate of the 2010/11 box, which came with an over bought MACD crossed down.  The breakdown candle implies that September would be the month that a break UP candle comes into play if this relationship has any predictive power.

Taking it further, as also noted in the previous post, the Ukraine noise does not help the sector and indeed could hurt in the short-term, because it keeps the wrong gold bugs on the tout.  So NFTRH keeps open some minor downside targets.

Taking it further still, those downside targets would end up being buying opportunities if gold’s macro fundamentals start to improve, which despite the emails I get to the contrary, really has not happened yet beyond a few ongoing positives.  But it had not happened yet in 2000 either.