SwampDogg, "last paragraph" and the HUI / SPX
For the most part I disagreed with myself with respect to that last paragraph...see "correction."
As to a long term view of the HUI, yes I can see its orderliness, consolidation after advance..I also notice periods when the SPX and HUI have been linked, and when they have gone their separate ways, see the chart below...Probably, as you may be suggesting, the linkage or lack there of between the HUI and SPX has had as much to do with the HUI being overbought, oversold, its rhythm as anything else.
stockcharts.com
In early Nov the HUI got relatively overbought with respect to the degree it was extended above the longer term average shown on the chart. A couple things could happen here...
a) Something fundamental occurs here that causes a strong inflow of funds into the small universe of mining stocks causing the HUI to extend this advance through the normally strong seasonal period...
b) the yen carry trade, spec long liquidation, and general market trepidation further impacts on all of the "riskier" trades and miners consolidate lower...
I am positioned to gain from a higher GOLD price (and Silver) and to buy on further weakness, which I think will occur first down into the 760-770 area for GOLD. A retest of the 43-44 break out point in the GDX should occur, as GOLD retreats, assuming it does...
stockcharts.com
We'll see ...higher GOLD prices into the end of the year?? That's also my overriding assumption. |
