As much as we would like to see some real action in gold stocks, the HUI has done nothing but slowly grind higher. I keep wave positions on about 13 gold stock related ETFs and indices and I can produce a different wave position for each one. The HUI bottomed in September of 2018 while I have some that just bottomed last month. There are no consistent bottoms where they all bottomed in September so rally may yet be a fake. I show what could be a wave count if any “A” wave was already completed in 2016.
This is still a bearish wave count I show but there could be only one more leg to the downside and then another fast move up. The trouble with that is if the HUI only went as high as I show, it’s not high enough to be followed by 5 waves down in Intermediate degree.
The wedge has the HUI price cornered into the cone which will force the HUI to show us it’s true colors. Gold itself has a different angle during the last 2-year bearish phase in gold stock related indices and ETFs.
The Gold/HUI ratio sits at 7.9:1 which is a cheap ratio compared to the 10:1 cheap ratio I have recorded. I would like to see the Gold/HUI ratio compress some more as it could hit 10:1 again.
I think the markets may be a bit slow during the holidays, extending the time it takes to play out into the first part of 2019.