Tag Archives: HUI

Gold Stock Sector: Rubber, Meet Road

By Biiwii

As posted at NFTRH.com

Gold stocks’ technical rubber meets the fundamental road

You may have noticed that I have written relatively little publicly about the gold sector over the last few years (we have covered it consistently in NFTRH to keep subscribers aware of the bear’s status, and protected against it). Is that strange for a writer who was probably known first and foremost as a ‘gold guy’? Not at all! It’s just that it is not desirable to get bogged down obsessing on a sector in a bear market when there are other fish to fry on the global macro landscape. But the process of finding and confirming a bottom in the gold sector is now front and center as more of the fundamentals that actually matter come into place. To those fundamentals, we need to marry the technicals.

We have consistently worked a theme that sees a comparison to the 1999-2001 bottoming phase in the gold sector. That was a time when stock markets topped out, an economic counter cycle took hold and gold began out performing most other items. Within this, we have also been considering the possibility of a final washout within the sector, whereby prices decline despite continually improving fundamentals. This condition was in play in Q4 2008, which was the last great buying opportunity.

Continue reading Gold Stock Sector: Rubber, Meet Road

HUI’s Bearish(?) Engulfing Updated

By Biiwii

Well, was the bearish engulfing candle a one day wonder?  Was it too perfect with respect to its predecessor in August?  Did every genius who can look at a chart see it and act upon it?  Well, this genius took a loss on his hedge but also took more miner profits to stay balanced.  That is because the US dollar is at a decision point and the stuff that has bounced while it has dropped to that decision point should take their cues shortly.

All of this in the context that Huey has an eventual higher target that you might just be able to make out by the declining red line there.


HUI Sports a Bearish Engulfing Candle

By Biiwii

NFTRH subscribers were apprised of the growing risk of a negative reaction in the gold stocks on Friday and again this weekend.  This was done first in an update and then in the regular report.  The recommended courses of action were ‘take at least partial profits’, hedge or at least ‘do not chase’.  Personally, I chose (b) and hedged.  Today I took some profits while still holding the hedge (DUST) in consideration of this chart’s Bearish Engulfing (BE) candle.

hui, gold stocks

Frankly, I am now net short while still holding my top miners.  Per the earlier post, NGD was sold as it has already reported earnings, pleased the market and was an obvious profit taking candidate.  But the picture is not as simple as gold bears might want to believe.

The cottage industry in gold bearishness is happy to see Mr. Bearish Engulfing although I have watched certain of them try to short this rally all the way up.  Maybe this time they’ll get a big score?  Well, a daily BE is a short-term thing with its effects basically valid for 1-3 days.  What is more bearish is the CoT data and SLV’s sentiment profile, each of which were discussed in #364.

However… (nope, we’re not done with the discussion because there are lots of things in motion now) there is a bullish fundamental underpinning in play for later this month.  This was discussed as well in the weekend report.

Man, none of this is easy and the bears who think charts are the only consideration (as fundamentals slowly improve over time) or the perma-bulls who just set and forget their viewpoints (and bias) paying little attention to charts, CoT and sentiment are unwilling to do this complicated and frankly sometimes annoying work.

That’s fine.  We are going to nail this thing because we do the work.  That will not include any ‘we called the bottom!’ b/s because this is a bear market and when it is either technically over or 100% in line fundamentally, we will make a call.  It will be late because it will have already been called about 10,000 times elsewhere over the last 3 years.

Back on the here and now, a reaction of some sort was likely.  But there are targets higher for this rally that could come about in late October or early November.  Let’s see how it shakes out and avoid automatic thinking.

“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…


…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

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


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).


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…


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.


* 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.