This Barron’s mining index shows how choppy diagonal wave structures can get. I have to find a much larger historical chart as the 1940’s wave count is not clear enough.
I don’t believe we are anywhere near Supercycle or Grand Supercycle degree with this index but a Cycle degree wave 3 top for 2011 still fits very well.
The wave 4 bottom in 2008 overlapped my wave “1” in Intermediate degree which happens on a regular basis at all degree levels. BGMI does not get updated that much and I added it for a different perspective.
Gold stocks have been heading north and sooner or later BGMI will breakout above the 2016 high point.
Sooner or later gold-stock investors will have to ask the ugly question, “Are gold stocks in just another bear market rally?”. The HUI and GDX can fit into the BGMI wave count so we have to wait and see until all “5” waves in Minor degree have played out.
After a small bullish move, most analysts will give you a continuation of the trend usually when the trend can reverse and head south. It’s the top trend line that has to be broken by a wide margin and that has not happened yet.
Last week the HUI and gold stocks started to back off right at the trend line which keeps me looking for the bearish wave counts which may take the rest of the year to find out. Hui has been in a bullish phase since September 2018 and it would have to take a complete retracement taking out the 131 price level. I have a peak in February 2019 (180) as the secondary high is starting to look like a completed wave 2.
The Gold/Hui ratio isn’t all that bad at 7.6:1 but that doesn’t mean it can’t go back to a 10:1 ratio all the same.
I added the Barrons Gold Miner Index this time, as it has more history than most all gold related indices or ETFs out today. For a “Choppiest” pattern rating, I would give it an 8-9 rating out of 10. It wasn’t until I switched over to diagonal wave counting that this pattern made any sense at all.
All commodities have diagonal wave structures as their core pattern which has been going on since the Little Ice Age, which I use as my Submillennium Elliott Wave 2 bottom. Elliott wave counting is not what you think we are seeing but its all about how well we understand the idealized wave count that is most important. Looking for that perfect impulse like they show in the books is futile at best and you will never find them. There are two types of diagonal waves and I have posted both as examples.
There is a 30-year cycle to most commodities with a ± 1-year error rate that still boggles my mind. The long term CRB chart shows this very well with gold doing the same thing but following 5 waves in Cycle degree.