HUI, Gold Stock Crash Review

 

hui-oct-5-2016

 

This HUI crash does not surprise me as we need a good bearish mood to flush out all those that are betting with too much of their net cash assets. This may go lower in the short term as another small degree wave 3-4  may need to play out.

If I’m even close, then we could see a “C” wave bull market that will impress us, as we could end up at a “D” wave top in Primary Degree. “D” wave tops are bull traps like the EWP book makes very clear with its description. 

 Yes, Cycle degree wave 3 in gold stocks and gold has a high chance of being completed with the 2011 highs, and what we are going through is a triangle 4th wave that is far from being finished.  I’m in the process of putting the Cycle degree wave 3 peak behind us in chart history.  This will still take some time, as it is impossible for me to do it all at once.  I cannot use any higher letters than Primary degree, until a potential 4th wave in Cycle degree has completed. That can still take many years and may not happen until 2021.

The pattern is more important than time, but the pattern will not work, if we are counting from the wrong peak or wrong bottom with the wrong degree. This is always an issue and reviewing on a consistent basis, mitigates this to some extent. Besides, you will never find a better fitting wave count by drawing some mythical wave pattern into the future. We can only find better fitting wave counts by looking into past chart history. 

This morning the Gold/Hui ratio was about 6.3:1 which is not at an extreme just yet, so more upside can happen. When we reach a 3:1 ratio again, then we are getting close to another extreme.  I only use the gold, “cash price”, (GCY00),  when calculating any ratio, and it matters not how wild gold swings up or down. The gold ratio is always working.         

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