Gold Stocks HUI, Review

 

hui-oct-21-2016

 

Wow, what a perfect Head&Shoulder pattern we have, with this HUI gold stock index.  An obvious pattern that can offer support. Support for what? If we talk about support we are actually very bullish. These patterns can also be the setup for a downside breakout.  Even though we may be getting closer to one type of a bottom, we still may not be finished with this gold stock correction.  Gold stocks still need to soar if this gold bull market is bigger than what the majority expect.

The HUI has crashed down and closed a big gap, but on the trip down has also opened a few gaps above present prices. Open gaps above our price range, are very bullish indicators. 

There is a very strong probability that an “A” wave in Primary degree has already arrived and at this time we would be in a Primary degree “B” wave bull market.  We have a long way to go, but this gold stock bull market can inversely track the general stock markets.  Traders will be jumping on and off this gold stock bandwagon, as they are afraid to miss the next big bull market in stocks.

The gold/Hui ratio is pretty normal just under 6:1. With  3:1 being very expensive, we still have some ways to go before the extremes will shift. When we get closer to the extremes, then we can increase the amount of ratio calculations we should make. 

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