HUI Gold Stock Index Review

Each gold stock related asset class has slightly different wave patterns, but this HUI chart is also forced into a wedge, even though the wedge is a sideways pattern. That actually may be the scariest part of this setup! The HUI has a long way to go to catch up with gold, which as the experts say gold stocks will catch-up to gold in due time. I’ve heard all that before at the 2011 peak and it never worked then and it sure will not work this time.

In order for this HUI index to be in the bullish phase already then that 2013 low,  must “not” get breached by the slimmest of margins, otherwise the HUI bear market is still in progress.  The 150 HUI price level would trash that 2013 low by a wide margin, which would confirm that the bearish phase is still running.  The top trend line is the main trend and the HUI would have to bust out of that range as well. What’s next HUI 150 or HUI 225?

The bottom rising wedge can be used because the HUI is still in a small rally.  It would take very little effort to break that bottom rising wedge, so this HUI needs to send us a clear direction sooner or later. This Micky Mouse move is just not doing it for me.

In 2008 Gold, Gold stocks and all related oil futures crashed right along with the stock market so, saying that it is “Different this time”, may not work as well!

Gold stocks heading north, while oil heads south would force the Gold/HUI ratio to change in a very short time. The Gold/HUI ratio is sitting at 7.24:1 which is about average, but I think it has been hitting a ratio brick wall, since April, 1, 2018.

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