I think gold stocks have trashed any idea that this bull market is just a 4th wave rally, but it will still work as a Minor degree “D” wave bull market. Just about all strong “D” waves act just like and real impulse wave, but in the end they will become bull traps. Short term HUI hit a bottom ending with a nice spike. I like to see those spikes as they are turning signals most of the time.
The entire HUI bear market works as a triangle which is just working up to a potential “D” wave. At about the 300 point price level, we have a lonely gap that has remained open since 2013. I have pointed this gap out many times in the past, but now it may come in handy as gaps can also supply critical turning points. It would not be a problem for the HUI to crash through that gap if it does.
The gold/hui ratio is sitting at 5.47:1 which is getting up there as being on the expensive side, but not anywhere near the extreme of 2.95:1 at the top of 2011. Starting to drift to the expensive side also suggests that the HUI is not on a big secular bull market. The real bull market will come, but it will only finish an old bull market. The only way we will truly know if this big bullish phase is a fake, and that would be a complete retracement and a new low. Even a few points lower will do the trick as that can act like a double bottom. Short term we need the HUI to travel to new highs, even if it is only by a small amount.