HUI Gold Stock Index Review


At this time I’m trying a different wave count for the 4-5 year, HUI bear market. If I constantly start having to use the smallest degree on my list of 15 degree levels, then I know I may have to increase my degree level by at least one degree. I still have three degree levels left, so there is lots of room to extend with.

What I see in the HUI is a potential running flat. There is some downside wiggling room left, but in the long run this gold stock bull market is not finished. A running flat is extremely bullish and from its base it can soar in a stunning fashion.

At the 2016 bear market low, the majority of analysts were bearish. When the consensus is bearish, and the forecasts for conditions to get worse are constantly hammered home, then ask yourself, “Who is left to get out”?

The reverse happens at any major top. When the consensus of expert analysts, paint us a rosy picture for the future of gold stocks, Ask yourself, again”Who is left to get in and buy”?  At a bull market top, you have analysts shouting to the rest of the world how great the gold stock bull market is going to be. Yet the HUI crashed and burned for close to 5 years.

My saying I like to use is, “market bottoms are the breeding grounds for bull markets, and bull markets are the breeding grounds of bear markets”.

My point is that the resource markets are cyclical and if you ignore this fact, you will miss every bull market that comes along.

Rick Rule – Resources: Bear Markets are the Authors of Bull Markets – YouTube

Rick Rule understands the cycles in the gold markets, and this short 10 minute video is important to watch.

Right now the Gold/HUI ratio sits at 7.10:1 from a base of 10:1. We would have to get closer to 3:1 before it starts to get very expensive.

At this time 2018 sure looks like it could be a banner year for gold related assets.

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