Best of the Week
Most Popular
1. 2019 From A Fourth Turning Perspective - James_Quinn
2.Beware the Young Stocks Bear Market! - Zeal_LLC
3.Safe Havens are Surging. What this Means for Stocks 2019 - Troy_Bombardia
4.Most Popular Financial Markets Analysis of 2018 - Trump and BrExit Chaos Dominate - Nadeem_Walayat
5.January 2019 Financial Markets Analysis and Forecasts - Nadeem_Walayat
6.Silver Price Trend Analysis 2019 - Nadeem_Walayat
7.Why 90% of Traders Lose - Nadeem_Walayat
8.What to do With Your Money in a Stocks Bear Market - Stephen_McBride
9.Stock Market What to Expect in the First 3~5 Months of 2019 - Chris_Vermeulen
10.China, Global Economy has Tipped over: The Surging Dollar and the Rallying Yen - FXCOT
Last 7 days
Risk/Reward in Silver Favors Buying Now, Not Waiting for Big Moves - 23rd Mar 19
Similarities Between Stock Market Today and Previous Bull Market Tops - 23rd Mar 19
Stock Market DOW Seasonal Trend Analysis - 23rd Mar 19
US Dollar Breakdown on Fed Was Much Worse Than It Looks - 23rd Mar 19
Gold Mid-Tier GDXJ Stocks Fundamentals - 23rd Mar 19
Which Currency Pairs Stand to Benefit from Prevailing Risk Aversion? - 23rd Mar 19
If You Get These 3 Things Right, You’ll Never Have to Worry About Money - 22nd Mar 19
March 2019 Cryptocurrency Technical Analysis - 22nd Mar 19
Turkey Tourist Fakes Market Bargains Haggling Top Tips - 22nd Mar 19
Next Recession: Finding A 48% Yield Amid The Ruins - 22nd Mar 19
Your Future Stock Returns Might Unpleasantly Surprise You - 22nd Mar 19
Fed Acknowledges “Recession Risks”. Run for the Hills! - 22nd Mar 19
Will Bridging Loans Grow in Demand and Usage in 2019? - 22nd Mar 19
Does Fed Know Something Gold Investors Do Not Know? - 21st Mar 19
Gold …Some Confirmations to Watch For - 21st Mar 19
UKIP No Longer About BrExit, Becomes BNP 2.0, Muslim Hate Party - 21st Mar 19
A Message to the Gold Bulls: Relying on the CoT Gives You A False Sense of Security - 20th Mar 19
The Secret to Funding a Green New Deal - 20th Mar 19
Vietnam, Part I: Colonialism and National Liberation - 20th Mar 19
Will the Fed Cut its Interest Rate Forecast, Pushing Gold Higher? - 20th Mar 19
Dow Jones Stock Market Topping Pattern - 20th Mar 19
Gold Stocks Outperform Gold but Not Stocks - 20th Mar 19
Here’s What You’re Not Hearing About the US - China Trade War - 20th Mar 19
US Overdosing on Debt - 19th Mar 19
Looking at the Economic Winter Season Ahead - 19th Mar 19
Will the Stock Market Crash Like 1937? - 19th Mar 19
Stock Market VIX Volaility Analysis - 19th Mar 19
FREE Access to Stock and Finanacial Markets Trading Analysis Worth $1229! - 19th Mar 19
US Stock Markets Price Anomaly Setup Continues - 19th Mar 19
Gold Price Confirmation of the Warning - 18th Mar 19
Split Stock Market Warning - 18th Mar 19
Stock Market Trend Analysis 2019 - Video - 18th Mar 19
Best Precious Metals Investment and Trades for 2019 - 18th Mar 19
Hurdles for Gold Stocks - 18th Mar 19
Pento: Coming QE & Low Rates Will Be ‘Rocket Fuel for Gold’ - 18th Mar 19
"This is for Tommy Robinson" Shouts Knife Wielding White Supremacist Terrorist in London - 18th Mar 19
This Is How You Create the Biggest Credit Bubble in History - 17th Mar 19
Crude Oil Bulls - For Whom the Bell Tolls - 17th Mar 19
Gold Mining Stocks Fundamentals - 17th Mar 19
Why Buy a Land Rover - Range Rover vs Huge Tree Branch Falling on its Roof - 17th Mar 19
UKIP Urged to Change Name to BNP 2.0 So BrExit Party Can Fight a 2nd EU Referendum - 17th Mar 19
Tommy Robinson Looks Set to Become New UKIP Leader - 16th Mar 19
Gold Final Warning: Here Are the Stunning Implications of Plunging Gold Price - 16th Mar 19
Towards the End of a Stocks Bull Market, Short term Timing Becomes Difficult - 16th Mar 19
UKIP Brexit Facebook Groups Reveling in the New Zealand Terror Attacks Blaming Muslim Victims - 16th Mar 19
Gold – US Dollar vs US Dollar Index - 16th Mar 19
Islamophobic Hate Preachers Tommy Robinson and Katie Hopkins have Killed UKIP and Brexit - 16th Mar 19
Countdown to The Precious Metals Gold and Silver Breakout Rally - 15th Mar 19
Shale Oil Splutters: Brent on Track for $70 Target $100 in 2020 - 15th Mar 19
Setting up a Business Just Got Easier - 15th Mar 19
Stock Market Elliott Wave Analysis Trend Forercast - Video - 15th Mar 19
Gold Warning - Here Are the Stunning Implications of Plunging Gold Price - Part 1 - 15th Mar 19
UK Weather SHOCK - Trees Dropping Branches onto Cars in Stormy Winds - Sheffield - 15th Mar 19
Best Time to Trade Forex - 15th Mar 19
Why the Green New Deal Will Send Uranium Price Through the Roof - 14th Mar 19
S&P 500's New Medium-Term High, but Will Stock Market Uptrend Continue? - 14th Mar 19
US Conservatism - 14th Mar 19
Gold in the Age of High-speed Electronic Trading - 14th Mar 19
Britain's Demographic Time Bomb Has Gone Off! - 14th Mar 19
Why Walmart Will Crush Amazon - 14th Mar 19
2019 Economic Predictions - 14th Mar 19
Tax Avoidance Bills Sent to Thousands of Workers - 14th Mar 19

Market Oracle FREE Newsletter

Stock Market Trend Forecast March to September 2019

AMEX Gold BUGS Index Chart and Analysis

Commodities / Gold and Silver 2013 Feb 25, 2013 - 07:04 AM GMT

By: David_Petch

Commodities

The following article was posted one week ago with analysis of the AMEX Gold BUGS Index (HUI), except the chart has been updated. Below is the only Figure present in this update, with further explanations of what each coloured line represents. Potential outcomes for the HUI are examined, with the strongest being to the upside rather than downside. Upside targets are discussed and what must happen for them to be met.


Weekly Chart of the AMEX Gold BUGS Index

In order to address where the HUI is, I have taken the monthly chart and added parabolic curve lines to indicate support/resistance lines. A blue parabolic line was drawn over all the major tops from 2002 until 2011. An upper black parabola was drawn to include the 2008 and 2011 top, followed by the lower 2012 high. Finally, a lower black parabola was drawn to include the 2005 and 2008 lows.

The two black parabolas intersect around August 2013, with current lower support at 345...a close below this level on the monthly chart would invalidate this analysis and trigger a move lower. At present, the HUI is now down for the fifth consecutive month that follows a two month rally. Trader time frames vary and my personal is following 6-8 month trends...based upon the anomaly we are in, I will provide signals going forward for tops on the weekly charts for those that wish to trade in and out of positions. For resistance, a move above 450 would signal a move out of the parabolic arc congestion zone would signal a strong move to the upside.

The US Dollar Index has been going sideways for months, which has been difficult in establishing a definable pattern...one comes to an end and it extends further. Based upon current positioning, it could extend into late March, but stochastics suggest 2-3 weeks at best...a move to late March would create an overbought condition. As such, the sideways price action in the Dollar has affected the price of gold, which in turn has affected the precious metal stocks, which is the primary cause of HUI having an extended decline.

The next parabolas that intersect are the upper blue and lower blue lines that intersect in mid 2014. Based upon the Contracting Fibonacci Spiral, a top in gold is expected now between August and October 2013, given the fact a turn around has not occurred so this will translate into a limited period of time for an upside move in precious metal stocks. Given the HUI declined to 380, the upside is likely to be capped at 520-525. This may sound like a move with limited upside or positive intonations, but one thing that this chart does indicate however, is that a decline to the 2008 lows has a lower degree of probability for occurring, given the length of the present decline What the chart does suggest however, is a continuation of a narrow trading range in the HUI until late 2014.

Two different cycle waves, one in purple and one in green denote two potential start points for the HUI back in 2001. I personally go with the purple starting point, which ties into the Elliott Wave counts illustrated at the top. By chance, the purple line terminates around mid 2014, which illustrates an equivalent period of time between waves a (2008 high) and the expected termination point of wave b currently forming. Wave b should be at least equivalent or longer in time compared to wave a for the proposed Elliott Wave count to be accurate. One other point to consider is if two waves are equivalent in price, then the subsequent wave should be equal to both segments. Although gold is set top peak in 2020ish, precious metal stocks may have their huge moves after and extend into 2025-2026.

To zoom back into the current time frame of present, I highlighted a green circle that illustrates the lower 21 MA Bollinger band falling beneath the 34 MA Bollinger band. This observation has been in effect for two months now...back in 2008, this lasted for around the same period of time before the index reversed to the upside. This suggests that a bottom is due within the next 3-4 weeks and although not shown on the chart below, refer back to the HUI update that shows the weekly chart has a bottom no later than the end of March.

If things go as expected, there should be a bounce up to around the 515-525 level to complete wave [D]...not that it could go higher, but this will that will be dependent upon how far the US Dollar declines. Wave [D] can not be shorter than wave [A] (from 2008, which was 4-5 months, depending upon how it is counted), so the upward move that is pending should be over 4.5 months. Once a top is reached in this coming move, it will be suggested to lighten up, as the coming Contracting Fibonacci Spiral top of the broad stock market indices is due no later than May 21st, 2013 (A comprehensive article will be published in the April 2013 issue of Technical Analysis of Stocks and Commodities that provides the most recent findings for this cycle). The CFS cycle has been in effect since it started in 1932, so there is highly probable to remain in force until proven otherwise.

Following the wave [D] top later this year, expect wave [E] to see a sideways trending pattern within the parabolas until mid to late 2014. What this indicates is a very sharp upward trend occurring between late 2014 and 2020ish, that should have a trajectory much like 2001 until 2008, only much higher in price. The only way to be in the game is to be invested in the game. Continue to be invested in high quality gold and silver stocks in politically secure locations around the globe that pay dividends. Only 20% or less of a precious metals portfolio should be allocated to exploration companies or emerging producers in order to minimize risk.

I will update oil, gold and the XOI later on today, as this article took significantly longer than anticipated. Also, I will update health care companies we are following, that still do not indicate tops until sometime between May and June 2013, which happens to coincide with the Contracting Fibonacci Spiral top.

Ownership of gold and silver bullion should be accumulated and held until the expected 2020 top, which will be an aid to capital preservation. I do want to again stress that the CFS cycle is pointing for a very sharp inflationary spike that tops out no later than August to October of this year (maybe November if the US Dollar Index continues to avoid correcting) which subsequently ties into the CFS cycle. If the HUI takes out 525, then it raises the possibility of a doubling from current levels, or 700-720, but again, this will be dependent upon market conditions at that point in time.

The main theme of this article is to illustrate where the HUI is within its pattern and how it remains confined to the parabolic arcs. A break below 340 would have bearish implications, but as noted from analysis on the monthly chart or daily and weekly charts, a bottom is expected within 2-4 weeks. An over extension of the downside move is only increasing the upside target.

One final Elliott Wave count not shown due to scale is that wave [C] completed in May 2012 and wave (B).[D] down is nearing completion before wave (C).[D] rises to complete a flat (3-3-5)...this count has as much of a probability for being correct as the current labelling scheme, so please keep this in mind.

One final item to address are stochastics 1, 2 and 3 shown below in order of descent. The %K in stochastics 1 and 2 have been in a down trend for nearly two years, which has created an oversold condition. There is no indication of a reversal in trend based upon stochastics from the monthly chart, but the daily and weekly charts do indicate a bottom within 2-4 weeks.

Only time will tell if we get a very sharp spike of inflation as expected before events unfold as expected as defined within the CFS cycles...that is all for now..back later on tonight, with an update of oil, natural gas and the AMEX Oil Index.

By David Petch

http://www.treasurechests.info

I generally try to write at least one editorial per week, although typically not as long as this one. At www.treasurechests.info , once per week (with updates if required), I track the Amex Gold BUGS Index, AMEX Oil Index, US Dollar Index, 10 Year US Treasury Index and the S&P 500 Index using various forms of technical analysis, including Elliott Wave. Captain Hook the site proprietor writes 2-3 articles per week on the “big picture” by tying in recent market action with numerous index ratios, money supply, COT positions etc. We also cover some 60 plus stocks in the precious metals, energy and base metals categories (with a focus on stocks around our provinces).

With the above being just one example of how we go about identifying value for investors, if this is the kind of analysis you are looking for we invite you to visit our site and discover more about how our service can further aid in achieving your financial goals. In this regard, whether it's top down macro-analysis designed to assist in opinion shaping and investment policy, or analysis on specific opportunities in the precious metals and energy sectors believed to possess exceptional value, like mindedly at Treasure Chests we in turn strive to provide the best value possible. So again, pay us a visit and discover why a small investment on your part could pay you handsome rewards in the not too distant future.

And of course if you have any questions, comments, or criticisms regarding the above, please feel free to drop us a line . We very much enjoy hearing from you on these items.

Disclaimer: The above is a matter of opinion and is not intended as investment advice. Information and analysis above are derived from sources and utilizing methods believed reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Comments within the text should not be construed as specific recommendations to buy or sell securities. Individuals should consult with their broker and personal financial advisors before engaging in any trading activities as we are not registered brokers or advisors. Certain statements included herein may constitute "forward-looking statements" with the meaning of certain securities legislative measures. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the above mentioned companies, and / or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Do your own due diligence.

Copyright © 2013 treasurechests.info Inc. All rights reserved.

Unless otherwise indicated, all materials on these pages are copyrighted by treasurechests.info Inc. No part of these pages, either text or image may be used for any purpose other than personal use. Therefore, reproduction, modification, storage in a retrieval system or retransmission, in any form or by any means, electronic, mechanical or otherwise, for reasons other than personal use, is strictly prohibited without prior written permission.

David Petch Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules