Since the 2011 peak gold stocks have been grinding downward until early 2016, when suddenly gold stocks exploded and soared until mid 2016. Now the HUI is grinding sideways for over a year, but I think there is at least one more leg up to come. This 2017 sideways action shows up in many of the other gold stocks related ETFs so it’s not an isolated pattern at all.
At this time I’m working gold stocks like a big Primary degree triangle, but that will have to be adjusted if gold stocks don’t break out of their slump that they have been in. I also looked at the ABX (Barrick) stock, which does not show this pattern, but it showed a very nice zigzag correction already completed.
I just can’t see Barrick’s stock soaring while all others are left behind so for now I will remain bullish until this HUI clears a new record high with a “C” wave bull market. “C” waves can produce some stunning moves. Barrick also contains a Wedge or inverted Megaphone, which can be powerful signals, before the trend turns again.
We could even be heading to a “D” wave peak, so the bigger gold bullish phase is not over yet, from my perspective.
The Gold/Hui Ratio is sitting at 7.60:1 which is more expensive than the 3:1 ratio, I have recorded. Cheap is about 10:1 so we’re not that expensive when we use gold as the measuring tool. In zigzags the “A” wave crashes can be very straight, but then the “C” wave is choppy and travels at a slightly different angle.
In a flat type of a pattern the leading “A” wave can be very choppy, but then the trailing “C” can explode, or implode with a sheer vertical drop, depending on what side of the market we are on.
The bears are slowly taking over in Canada as it is getting more and more difficult to keep painting Canada’s outlook with a rosy brush, at least in the short term. Since the 2009 bottom the TSX produces a diagonal 5th wave as well, which just about looks like the diagonal came off of the EWP book. I labeled it the lazy way this time, but it’s a diagonal that already has finished. I don’t think Canada is going to be insulated from world turmoil as it could get hurt the most if we can’t get pipelines to ship our crude oil out. Even the Permian has bottle necks with not enough pipelines sending crude oil out of the US Permian region.
Either way, no matter what, all trends must come to an end, busting the myth that stocks will stay permanently high! The majority of stock investors believe there should be no volatility in the markets with no crashes so when markets do crash, investors blame everyone else except themselves for buying in at extreme tops. They will find the evil culprit or a company that will bring the TSX down, if not they will make some shit up or create a “consensus opinion”.
I think this TSX has to crash below 11,000 which will produce a big support base at the same time. That price range should not hold as the previous 4th wave low is still closer to the 8,000 price level. If I painted for readers a bullish picture with SC or GSC numbers and letters, then I/m in the same bull trap as the investors presently are. That is unacceptable to me as mainstream media will not call a bull market top in fear of being mocked. Since 2000 this will be my third bear market that I’m counting down, but even that is not good enough if we haven’t learned anything from the two other bear markets!
I have covered some of the biggest markets in the world, looking for those mythical Cycle degree wave 3 tops I keep talking about. It is impossible for me to track them with the detail required to confirm any move and no one has stepped forward that wants to count down a Cycle degree bear market in any market I cover.
Elliott Wave 5.0 is all about locating all 5 waves in Cycle degree which must be found before we can ever enter any part of the SC degree world. Stepping from Cycle degree sequence into the SC degree world, is like stepping through a Stargate so we want to be extra careful to make sure we have the right combination of numbers and letters to let us through. You need to have the right passcode to let you join the SC degree world.