GDX, which reflects the HUI pretty well, and is trucking along, maintaining higher lows, pretty consistently. In Dec 2016 GDX hit another bottom, after which it soared off in another leg. There is a high probability that we are in a much bigger gold stock bull market, which may be a “D” wave bull market in Primary degree.
Some may even try to get the entire structure into a wave 1-2 and not an “AB” like I have. This doesn’t compute as it would be a very tall wave one, which rarely happens. When they look long, chances are good its an “A” wave before any wave 1. An Intermediate degree zigzag would need a 5-3-5 type of a move, but we are a long way away from even getting close, as we need wave 3-4-5 still to complete in Minor degree. Mind you the 5 waves up can be so choppy and erratic that every correction could seem like the end of the bull market.
A bull market is very hard to kill, until it has played out all moves according to the script of an inverted zigzag. Tracking the Gold/Gdx ratio helps to give us more of an objective view when these gold stocks are starting to get very expensive. At present we are sitting at about a 53.46:1 ratio, which is a bit more expensive, but nothing I would jump up and down about, or find alarming. If we ever end up closer to 30:1 again, then we may have a different ball game and all other contrarian indicators would need to be reviewed as well.
We still have a long way to go as the next target is to breakout to all time new bull market highs, past the $32 price level.