Tom L's HUI Chart Review

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Tom L
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Tom L's HUI Chart Review

1 Year Daily Chart Here:

http://www.flickr.com/photos/29681681@N06/6111972581/

My commentary:

It looks like the big blue uptrend channel is still intact.  The HUI ran right up to it and met resistance on Friday.  So, whle the break above 610 was nice (Great, even!) it is, for right now, very much still under control.  There is a gap that exists with Friday's action which will most likely be filled,  especially if there is any market weakness after the U.S. Holiday. 

So, the breakout creates two important potential scenarios for those that have been on the sidelines waiting for a bigger correction in G&S:

1) Buy into the gap-filling action if it occurs between 606 and 612 on the HUI, this will serve as a re-test of the breakout level and if that holds will be insanely short-term bullish for the HUI and if you wait any longer you will be chasing price.  Dreams of 1650 Gold and 36 Silver should stay locked in your head, but your fingers should be hitting the Buy button.

2) Be prepared for a stink bid scenario if 605 doesn't hold for a run down to the Green uptrend line around 595 on Tuesday. 

If the Blue Uptrend Line is taken out on Tuesday, ie. HUI >622, then watch the Purple Uptrend Line.  The RSI is not overbought but the MACD is getting into peak territory.  We could spend the week between the Green and Blue/Purple Uptrend lines, consolidating the breakout, which is also insanely bullish.  Listening to Trader Dan right now on the KWN weekly metals wrap and it should be obvious that if Gold busts through the $1910 high, the HUI could easily take out all of this overhead resistance and run to 685 over the next month.  The monday night/Tuesday morning action in G&S will give us a clue as to how the HUI will follow through Friday's Bonanza day.

I'll re-visit this chart every week.

Ta,

ps. My HQM (High Quality Miners List) ended the week up 4.1% at 104.146, +0.1% vs. the HUI and +0.4% vs. the XAU.  If not for the SVM shenanigans, those gains would have been even better.  As the data piles up I'll post the 5, 10, 20, and 50 DMA's of the index as well.

Edited by admin on 11/08/2014 - 06:21

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Eric Original
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Good stuff as always Tom.

Good stuff as always Tom.  Thx

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Shill
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Great stuff Tom,  Please keep

Great stuff Tom,  Please keep it coming.

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Tom L
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HUI for the Week Ending 9/9/2011

10 month Daily chart Here:

http://www.flickr.com/photos/29681681@N06/6132843656/

I've refined my look from last week on the HUI and had I just used the damn pitchfork tool earlier I would have made a lot more money in the past 2 months.  Oh well, I never said I was an expert.  Note the Purple Uptrend line which was the resistance line on last week's chart (drawn in blue there), (http://www.flickr.com/photos/29681681@N06/6111972581/).  It's been busted, albeit with violent intra-week chop, and with good reason.  That close on Friday 9/2 represented a major turning point in the history of the HUI and it wasn't going to be pretty.  Now that the Purple Line as well as the mid-line of the BluePitchfork are behind us the Black and Green Power Uptrend Channels are dominant.  Had I drawn this chart last week this way, again, we all could have made more money than we did this week.

The Green channel is not sustainable in the long or, in my opinion, short term.  It represents the extreme energy that had built up in the HUI during the Year of the Ratio Trade which started last November.  But, if we are heading into a big week for Gold and Silver, which I think we are given the bullish action to close the week then I would say that the Center Green line should act as the first level of resistance and the Black Lien as the 2nd as the HUI makes a run towards the 665-670 area next week. 

After that there will be a re-trenchment of some form as the market tries to figure out what the rate of ascent on the HUI should be.  I'm not convinced either the Black or Green Channels are sustainable, so a move back to the mid-line of the pitchfork to close the month is where I'll be looking for a bounce.  The RSI is not overbought, per se, but the HUI in previous rallies was never allowed to breach 70, no less play above it for any length of time and I don't suspect that wildly bullish behaviour is going to spring up all of a sudden and push this thing into the heavens for 6 weeks before a correction.  That might happen on the next move higher.

Put simply the HUI has at best one more week of this rally, which could top out at a 150 point move (or 29%!) in 7 weeks.  That should be a good enough return for anyone, even me, before taking a well earned breather.

I would be selling into strength on any moves towards 660 and any break of the lower Green Channel Line.

Questions?  Comments?  Think I'm an Id10t? 

Ta,

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Eric Original
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Don't beat yourself up about

Don't beat yourself up about it Tom.  Do what you can, hit "Save", and move on.  I've had to learn that too on my miner thread.  Keep up the good work.

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