1 Year Daily Chart Here:
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.
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: Tom L on Nov 8, 2014 - 5:21am