Tag: hui index

HUI Technical Chart

| September 15, 2012 | Articles: Gold Silver Stocks
HUI Technical Chart

The HUI is closing in on a KEY technical resistance level on its weekly chart at the 50% Fibonacci Retracement level of its last year summer high and this years trough. That level is basically right at the high made in today’s session as it comes in beginning at the 504 level. If the HUI closes the week through this level on a good strong note, look for the index to move towards the 540 level. Note that all of the major moving averages, whether the shorter term 10 and 20 week or the 50 week moving average are either turning higher or flattening out and beginning to turn.

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Gold Stocks: History Argues for More Upside

Gold Stocks: History Argues for More Upside

Gold and silver stocks are not only the most volatile sector but the highest beta sector. Therefore the percentage moves can be quite exaggerated relative to the market. Currently, the shares have emerged from a W bottoming pattern. They have gained substantially (in percentage terms) in just the past month. I wanted to consult history and in particular the rebounds following the bottoms in 2000, 2005 and 2008 to get a sense of the reasonable upside potential over the coming months. Judging from history, one should not be alarmed about the recent gains because these rebounds tend to run much longer and higher. Below we chart the HUI in weekly […]

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Gold-Stock Breakout

Gold-Stock Breakout

After weathering a long consolidation followed by a major correction, gold stocks remain deeply out of favor today. But this bearish sentiment is slowly yielding as gold powers higher in its usual autumn rally. Gold stocks are starting to show signs of life again. And after their strong advance since late July, they are now on the verge of a major upside breakout. Odds are this event will herald a major new upleg. Despite the gold-stock sector commanding some of the biggest gains of the past decade, gold stocks have become a four-letter word. The flagship gold-stock index, the HUI, essentially stalled out way back in late 2010. Then it […]

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HUI Chart – August 16, 2012

HUI Chart – August 16, 2012

The Mining Sector shares have shown some strong performance over the past three weeks having solidly rebounced from down near 390 moving up through several overhead resistance levels. A push through overhead resistance near 440 sets up a run towards a major resistance level centered near 460, which is the point that needs to be bested for a trending move to the upside to develop.

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Gold right at the Top of its Recent Trading Range

Gold right at the Top of its Recent Trading Range

Gold has pushed to the very top of its recent trading range as it works within the confines of its consolidation pattern noted on the chart below. It either mounts a solid breakout this time around or it will fall back towards $1600 and slightly below once again. I have noted that for the last 5 weeks or so, the lows have been slowly creeping higher hinting at market strength. It simply needs a spark, something to ignite it and push it past the strong selling pressure emerging between $1620 – $1630. Today’s strength is predicated on news out of China showing its economy slowing also. Traders are expecting the […]

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Betting On Mining Stocks’ Higher Prices May Not Be Such A Good Idea

Betting On Mining Stocks’ Higher Prices May Not Be Such A Good Idea

All the fundamental factors that have made gold such a stellar investment for the last decade are still intact. Fiat money is still being produced on easy street around the world, which in turn fuels worries about the dwindling purchase power of the currencies; central banks are still accumulating gold; real interest rates are still negative so investors don’t give up any interest rate by investing in gold. However, there are several things that have been affecting gold negatively over the past few months, much to our dismay. One of them is the dollar’s strength against the euro and gold’s recent tendency to move inversely to the dollar and in […]

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HUI to Gold Ratio Dipping Down Towards Undervaluation Levels Once Again

HUI to Gold Ratio Dipping Down Towards Undervaluation Levels Once Again

he breech of the 400 level in the HUI has brought out some further stop-loss related selling as well as fresh shorting by hungry bears in the sector. GoldCorp’s news from yesterday is still impacting the miners in general. That being said, the underperformance of the mining shares against the price of Gold is dropping this important ratio down toward those levels which have been considered as “undervalued” once again. While it is small consolation to mining equity bulls to see the value of their holdings being diminished once again, it does appear that we are entering a region that should engender value based accumulation sooner rather than later. In one […]

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Precious Metals: Keep it Simple

Precious Metals: Keep it Simple

This weekend I had a conversation with a fund manager friend who I admire. He lives in the Asia-pac region and has tremendous knowledge of and insight into markets. I asked him what his advice would be. He told me it’s simple. My advice for the next three months is patience. My advice for the next three years is precious metals. People often feel the need to complicate things by over-trading and over-thinking the situation. In this piece, we want to keep it simple for Gold and Silver and the mining shares. The first chart is the chart we published back in May when suggesting that a major bottom could […]

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Gold-Stock Valuations show Gold Stocks are incredibly cheap

Gold-Stock Valuations show Gold Stocks are incredibly cheap

Gold stocks languish in a sentiment wasteland these days, left for dead by everyone but a small contrarian remnant. So naturally bears abound, their arguments dominated by the idea that gold miners’ costs are so high that they can’t make money anymore. Provocatively though, this notion is totally wrong. As gold-stock valuations reveal, gold miners are earning profits hand-over-fist at today’s gold levels. Valuations are the fundamental heart of stock investing, ultimately driving the vast majority of long-term performance. Investors buy stocks because they want a stake in companies’ future profits streams. The less they pay for each dollar of future profits, the better their ultimate returns. And the price […]

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HUI Chart Pattern Needs Some Help

HUI Chart Pattern Needs Some Help

As has been the case with the mining shares for some time, (going back as far as the first round of QE in late 2008), they require a shift in trader sentiment away from a DEFLATIONARY scenario towards one of INFLATION. The latter is what has resulted from each round of stimulus launched by the Federal Reserve. This week’s lack of an imminent launch of a QE3, has set mining shares, as well as bullion, back on their heels as traders have made the shift back towards expecting a further slowdown in global growth and more of a deflationary environment. This shift is showing up in the decidedly bearish chart […]

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Gold Stocks Recover from Late Friday Afternoon Mauling

Gold Stocks Recover from Late Friday Afternoon Mauling

AS many of you no doubt are aware, there appeared to have been some sort of coordinated bear raid on many of the smaller gold companies late Friday afternoon, particularly in the aftermarket hours when trading conditions are at their absolute thinnest. The entire sector however is getting a firm bid in today’s session even with the metals initially lower. Their strength seems to be pulling both gold and silver higher. The HUI is closing in on very stubborn chart resistance in the 460 region. This region marked the bottom of a consolidation period back in March of this year and is now serving as a line for sellers to short […]

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Cheap Gold Stocks – part 3

Cheap Gold Stocks – part 3

Gold stocks have recovered sharply following last month’s panic-like capitulation plunge. But this embattled sector still remains incredibly cheap relative to prevailing gold levels, which drive gold miners’ profits and hence ultimately their stock prices. While it is very challenging psychologically to buy in deeply-out-of-favor sectors, the panic-like gold-stock bargains out there today are simply amazing. Speculators and investors have long bought gold stocks for one primary reason, to leverage the price of gold. Between the April-2001 dawn of today’s secular gold bull and 2008’s once-in-a-lifetime stock panic, gold stocks indeed leveraged gold beautifully. When gold rallied in major uplegs, the flagship HUI gold-stock index would generally amplify this metal’s […]

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Mining Shares Continue to Outperform the Broader Equity Markets

Mining Shares Continue to Outperform the Broader Equity Markets

The last time we had a THREE CONSECUTIVE WEEKS during which the mining shares outperformed the broader US equity markets was in late October/early November of 2011.  While the  month of May this year has been attrocious for the S&P 500, it has been an excellent month for the miners. June is starting out on a good note to say the least as we witness today’s strong upmove in the mining shares. My interpretation of this event is that today’s payrolls number, which was so horrible that it cannot have any sort of positive spin placed upon it, has jolted traders into moving more and more to the view that […]

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Gold-Stock Capitulation

Gold-Stock Capitulation

Gold stocks have been pummeled mercilessly this month, their price action looking almost apocalyptic. The psychological stress spawned by such extreme weakness is intense, breaking the wills of this sector’s few remaining bulls. This week their selling cascaded into a full-blown capitulation, a mass surrender by weary investors. While exceedingly miserable, these events flag major long-term bottoms. Over the course of gold’s powerful secular bull, the gold stocks have been a sentiment roller coaster. Early on their gains were enormous, gold stocks even rocketed higher while the general stock markets plunged in a brutal cyclical bear. Though they were nearly obliterated in 2008’s once-in-a-lifetime stock panic, as expected they soon […]

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