Tag Archives: Elliott Wave HUI

HUI 2011-2018 Update

 

The HUI is just an index of gold and silver stocks which has been in a bear market since the bubble mania peak in 2011. All commodaties are in diagonal wave structures where normal stock market wave counting will not work. The 4th wave rally in Intermediate degree is a bear market rally and this will get confirmed when the HUI crosses below the 100 price level, which is only 35 points lower from today’s price levels.

The Gold/Hui ratio is at 8.85:1 which is getting very cheap when we use the gold price as money.  I have records of the HUI as 10:1 being an extreme cheap ratio, but I would expect a much bigger extreme to still show itself by the end of this year! I can still stretch the time to early 2019 if need be, but then gold can be bullish well into early 2020 after which the HUI will suffer the biggest decline ever.

Any “B” wave top will also be the last time that we can unload gold bullion, because gold could suffer a $1300 price crash lasting well over a year or more. Deflation is the real threat and the gold market is the clearest example of what happens when deflation sets in. Even the HUI has a triangle in it so this has been very common in all gold stock related ETFs. I’m using GDX and GDXJ as my main trading ETFs but added options (PUTs) in August, which can turbo charge the returns.

One month experience does not make an expert, but by the end of this year I will be forced to sell all my PUTs after which, I will look at the track record as a new cash base will get established.

Hits: 8

HUI 2011-2018 Bear Market Update!

The 2011 peak was a 30 year gold/silver mania peak that has still to finish the first set of 5 waves down in Intermediate degree. They are connected with zigzags  like “All” commodities are, with our last “B” wave in Minor degree already completed. The “C” crash bottom will be the last one when it finishes sometime towards the end of 2018!

It also means the angle of the decline will also increase as the HUI still has to fall below the 100 price level, to confirm that our present bullish phase was just a big bear market rally. It was only an Intermediate degree at the 2016 top, so any future “B” wave in Primary degree has to exceed the 2016 peak by a wide margin.

This anticipated “B” wave in Primary degree will be the last and final chance to unload all gold stock and bullion investments. I always work 3 steps ahead of the crowd, which I have been doing for decades already, as it is the quickest way for me to catch mistakes at the earliest time.

Those who are not ready by the end of September will be late, and as it takes major planning to reverse once the bottom is near!  I will use $5000 as my USD model account and have sacrificed about $500 CAD with 10 Puts on GDX (100 shares per PUT) which expire by September 18th. I will take any green offerd to me at that time but the pay back will all be on my CAD side.

This is all good as I also get to build up my CAD side as well as my USD side. As of this morning all my accounts are in the green! Which is a good thing, right?  🙂

 

Hits: 7

HUI Big Picture Update

I firmly believe the entire commodities market is diagonal in nature and its the main reason the markets are so choppy. Diagonals are just big zigzags linked togother over hundreds of years.  This is why the bull market start, is the [C] wave in Primary degree.  The [B] changes it’s role and is now a “Buy”signal.  Our present day market is the first part to a three part Cycle degree correction and we are far from finished. If this present rally is in a bull market it has to soar. It’s not, so I look for a bearish point of veiw right away.   It may take until years end but this market will not hold up and the others will all follow.  A bear market rally always retraces itself ,so any new record low must happen.  We are looking at this HUI chart with the knowledge that that Death Cross is just below weekly gold. How can one justify  keeping clients in gold investments?

You can scream as loud as you want yet they don’t care.  Once this HUI breaks a little more, then you will see the knife falling. Basing your whole life on a number is pretty scary if you ask me.  I have to make a better living for myself and if I was invested I would be wiped out. I bailed out but the knife cut me and it was real blood.

I’ll make it all back on this short trade as I have done that before and may even double my cash out by the end of this year or sooner. I’m loaded for bear and so far so good.

The gold bulls don’t realize it but this type of pattern could produce a gap down very easily. Imagine gold gap down $50, what horror there would be?  As long as gold falls below $1047 I win my 10 ounce silver coin. They are beautiful coins and I nickname it the “Silver Stone”.  There is more to this betting story but I will not divulge it now as the $1047 price has to be breached first.

Hits: 9

HUI 2000-2011: Another “C” Wave Bull Market?

 

This wave count is different than anything I have publish as I changed the 1980 peak and the 2000 bottom in the HUI is a Primary Degree “B” wave bottom. Before readers freak out and think this can’t happen, then you don’t know the diagonal wave structure. The entire commodity Submillennium wave 5 sequence is diagonal based. Evidence of that fact also shows up in the pre 1920’s of the DJIA as for 300 years or more the entire world was based on commodities, with coal being the main low cost energy source that built all early England and America. Of course the rest of the world also benifited. The Roaring  20s is when the stock markets invented other financial instruments to invest in, after which the DJIA no longer acted like a commodity.

I though long and hard already about the “C” wave bull market, and I’m very confident it will not do any damage to my present Cycle degree wave four bear market.

What it can change is wave 5 in Cycle degree as it may also be another huge zigzag bull market. The entire world of wave analysts are stuck in impulse mode, as they count everything that goes up as an impulse. Trying to force 5 waves into a bull market like all the experts do, goes against my grain of not forcing wave counts.

I will slowly switch all my gold and silver ETFs to a Primary degree “C” wave peak for 2011. If we do some quick math then this Primary degree zigzag was 31 years long.  I already made up a gold wave count containing a zigzag in Primary degree but I will not post it for a little while longer.  All my work is between Cycle degree wave positions, which is a minimum of two degrees lower than the rest of the waver herd in the rest of the world. Cycle degree comes before any SC degree can happen, so if I’m wrong I will be the first to know about it as well.

I also calculated another Gold/Hui ratio today, which was about 7.3:1. This is only a little cheaper than the April, 1, 2018 ratio of 7.05:1.  A cheap Gold/Hui ratio would be around 10:1.

 

Hits: 20

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.

Hits: 17

HUI Gold Stock Correction Review: Will It Ever End?

Since the 2011 peak gold stocks have been grinding downward until early 2016, when suddenly gold stocks exploded and soared until mid 2016. Now the HUI is grinding sideways for over a year, but I think there is at least one more leg up to come. This 2017 sideways action shows up in many of the other gold stocks related ETFs so it’s not an isolated pattern at all.

At this time I’m working gold stocks like a big Primary degree triangle, but that will have to be adjusted if gold stocks don’t break out of their slump that they have been in.   I also looked at the ABX (Barrick) stock, which does not show this pattern, but it showed a very nice zigzag correction already completed.

I just can’t see Barrick’s stock soaring while all others are left behind so for now I will remain bullish until this HUI clears a new record high with a “C” wave bull market. “C” waves can produce some stunning moves.  Barrick also contains a Wedge or inverted Megaphone, which can be powerful signals, before the trend turns again.

We could even be heading to a “D” wave peak, so the bigger gold bullish phase is not over yet,  from my perspective.

The Gold/Hui Ratio is sitting at 7.60:1 which is more expensive than the 3:1 ratio, I have recorded. Cheap is about 10:1 so we’re not that expensive when we use gold as the measuring tool.  In zigzags the “A” wave crashes can be very straight, but then the “C” wave is choppy and travels at a slightly different angle.

In a flat type of a pattern the leading “A” wave can be very choppy, but then the trailing “C” can explode, or implode with a sheer vertical drop, depending on what side of the market we are on.

Hits: 14

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.

Hits: 4

HUI, 2000-2017 Gold Stock Review

 

Many of the other gold stocks related ETFs and indices have very different wave counts. Some look more bullish while others look far more bearish. This is what diagonal wave structures can do.  The 2008 crash was not a surprise event as Steven Jon Kaplan had short positions on GDX and I tried shorting GDX as well, but got forced out several times before I gave up.  The 2008 crash showed that gold stocks “AND” the general stock markets can crash together, at least for a short period of time.

The angle of the 2008 crash assured the contrarians that another bullish phase would happen. The HUI took its sweet time about it because it sure looked like another zigzag in a bullish phase. Gold stock insiders were selling again at the 2011 top, while stock market insiders were buying across all indices that I cover. 

Sure enough, by the 2011 top the stock mania was ready to fly as gold stocks imploded in a long 4 year bear market. From the 2011 top which I use as a Cycle degree wave 3 position, the gold stock markets displayed what looks like a set of 5 waves down. Due to the diagonal nature of the decline, there could be a single zigzag during the 2013 sideways correction. 

In early 2016 the HUI hit a bottom with about a 10:1 Gold/Hui ratio from an expensive ratio of 3:1. Today the Gold/Hui ratio is 6.45:1 which is shifting a bit towards the expensive side, but it will take much more than that to kill this gold stock bull market. Not until we see a sustained expensive Gold/Hui ratio and reports of gold stock insiders selling again, will this bullish phase be ready to pop one more time. 

Even now gold stocks are not displaying a great looking potential “C” wave bull market, so we have to expect some wild moves that may surprise us. 

I show three trend lines,  and the peak of the center trend line could be closer to reality than the top trend line is.  Technically speaking, I would love to see that 2016 HUI top,  get completely retraced. It is one of the ways that will help confirm that we are still in a bullish phase correction. 

Hits: 4

HUI Gold Stock Review

I looked over the Barron’s gold index before I looked at the HUI. They both do not give me any great clues as to the potential location we may be at. That 2016 low was a major low as all the gold/ratios have confirmed. The 2011 to 2016 gold stock bear market fits into a 5 wave sequence better than any other sequence, so it can put us into a potentially large degree zigzag. It would also mean that no new record high can happen as zigzags cannot go above their starting point, of the correction.

I’m not happy with the HUI pattern between the February 2017 top, to the July 2017 bottom. It does not fit well into a wave 2 correction at this time. Worst case we could be heading up a “C” wave leg, which cannot break out into new record highs. Instead of a 1-2 wave count we could be in an “ABC” count just as easily. Any trend lines that I do have are there to try and box the pattern in, but at times that works about as well as trying to lock a herd of angry cattle, into a corral.

There are at least 3 other gold stock related ETFs with this same type of a pattern. In the long run I’m bullish as any Gold ratios are not anywhere near any extreme at this time. Besides, no gold stock insiders as a group has sold out, besides Steven Jon Kaplan would be one of the first to post this information when it happens. Insiders do not buy their own stocks back on a whim, nor do they ever sell on a whim. They will hold for many years if they have to, and our wave counts should never conflict with this information.

One contrarian indicator I use is the Gold/Hui ratio, which is sitting at 6.23:1 right now. Very cheap was 10:1 with very expensive being closer to 3:1. At present this does not tell us that a sudden HUI crash is going to happen any time soon. Besides, only the late comers that take big positions, will get burned if that were to happen.

Hits: 4