Best of the Week
Most Popular
1.Spain Ignores Scotland Lesson as Catalan Independence Referendum Could Spark Civil War - Nadeem_Walayat
2.Used Car Buying From UK Dealer Top Tips, CarMotion.co.uk Real Customer Experience - N_Walayat
3.Spanish New Civil War Begins as Madrid Regime Storm Troopers Quell Catalan Independence Rebellion - Nadeem_Walayat
4.Virgin Media Broadband Down, Catastrophic UK Wide Failure! - Nadeem_Walayat
5.Are the US Markets setting up for an Early October Surprise? - Chris_Vermeulen
6.The Pension Storm Is Coming To Europe—It May Be The End Of Europe As We Know It -John_Mauldin
7.Stock Market Crash 2018; Will it Prove to be Another Buying Opportunity - Sol_Palha
8.The Profoundly Personal Impact Of The National Debt On Our Retirements - Dan_Amerman
9.Stock Market as Good as it Gets; Like 2000 With a Twist -Gary_Tanashian
10.1987 Stock Market Crash 30th Anniversary Greatest Investing Lesson Learned - Nadeem_Walayat
Last 7 days
Bitcoin Hits $6,000, $100 Billion Market Cap As Helicopter Ben and Jamie Demon Warn The End Is Near! - 22nd Oct 17
Time for Caution in Gold Miners - 22nd Oct 17
“Great Rotation” Ahead; Will it Be Inflationary or Deflationary? - 21st Oct 17
The Trigger for Volatility, Rates and the Next Crisis - 21st Oct 17
Perks to Consider an Agent for Auto Insurance - 21st Oct 17
Emerging Megatrends Hurting Consumers - 21st Oct 17
A Catalyst of the Stock Market Bubble Bust - 21st Oct 17
Silver Stocks Comatose - 21st Oct 17
Stock Investors Ignore What May Be The Biggest Policy Error In History - 20th Oct 17
Gold Up 74% Since Last Stock Market Peak 10 Years Ago - 20th Oct 17
Labour Sheffield City Council Employs Army of Spy's to Track Down Tree Campaigners / Felling's Watchers - 20th Oct 17
Stock Market Calm Before The Storm - 20th Oct 17
GOLD Price Creates Bullish Higher Low - 20th Oct 17
Here’s the US’s Biggest Vulnerability in NAFTA Negotiations - 20th Oct 17
The Greatest Investing Lesson Learned from the 1987 Stock Market Crash - 20th Oct 17
Stock Market Time to Go All-in. Short, That Is - 19th Oct 17
How Gold Bullion Protects From Conflict And War - 19th Oct 17
Stock Market Super Cycle Wave C May Have Started - 19th Oct 17
Negative Expectations, Will the Stock Market Correct? - 19th Oct 17
Knowing the Factors Affect your Car Insurance Premium - 19th Oct 17
Getting Your Feet Wet In Crypto Currencies - 19th Oct 17
10 Years Ago Today a Stocks Bear Market Started - 19th Oct 17
1987 Stock Market Crash 30th Anniversary Greatest Investing Lesson Learned - 19th Oct 17
Virgin Media Broadband Down, Catastrophic UK Wide Failure! - 19th Oct 17
The Passive Investing Bubble May Trigger A Massive Exodus from Stocks - 18th Oct 17
Gold Is In A Dangerous Spot - 18th Oct 17
History Says Global Debt Levels Will Lead to Another Crisis - 18th Oct 17
Deflation Basics Series: The Quantity Theory of Money - 18th Oct 17
Attractive European Countries for Foreign Investors - 18th Oct 17
Financial Transcription Services – What investors should know about them - 18th Oct 17
Brexit UK Vulnerable As Gold Bar Exports Distort UK Trade Figures - 18th Oct 17
Surge in UK Race Hate Crimes, Micro-Racism, Sheffield, Millhouses Park, Black on Asian - 18th Oct 17
Comfortably Numb: Surviving the Assault on Silver - 17th Oct 17
Are Amey Street Tree Felling's Devaluing Sheffield House Prices? - 17th Oct 17
12 Real-Life Techniques That Will Make You a Better Trader Now - 17th Oct 17
Warren Buffett Predicting Dow One Million - Being Bold Or Overly Cautious? - 17th Oct 17
Globalization is Poverty - 17th Oct 17
Boomers Are Not Saving Enough for Retirement, Neither Is the Government - 16th Oct 17
Stock Market Trading Dow Theory - 16th Oct 17
Stocks Slightly Higher as They Set New Record Highs - 16th Oct 17
Why is Big Data is so Important for Casino Player Acquisition and Retention - 16th Oct 17
How Investors Can Play The Bitcoin Boom - 16th Oct 17
Who Will Be the Next Fed Chief - And Why It Matters  - 16th Oct 17
Stock Market Only Minor Top Ahead - 16th Oct 17
Precious Metals Sector is on Major Buy Signal - 16th Oct 17
Really Bad Ideas - The Fed Should Have And Defend An Inflation Target - 16th Oct 17
The Bullish Chartology for Gold - 15th Oct 17
Wikileaks Mocking US Government Over Bitcoin Shows Why There Is No Stopping Bitcoin - 15th Oct 17
How to Wipe Out Puerto Rico's Debt Without Hurting Bondholders - 15th Oct 17
Gold And Silver – Think Prices Are Manipulated? Look In The Mirror! - 15th Oct 17

Market Oracle FREE Newsletter

3 Videos + 8 Charts = Opportunities You Need to See - Free

HUI Gold Stocks Chartology... Past Present and Future

Commodities / Gold and Silver Stocks 2015 Feb 05, 2015 - 04:01 PM GMT

By: Rambus_Chartology

Commodities

Today I would like to look at the precious metals complex and see how things are moving along. Consolidating would be an understatement. The PM complex has been in a very large consolidation pattern going all the way back to the June 2012 low where the HUI, GLD and SLV all bottomed together. From that low all three have been chopping in a falling type pattern making lower lows and lower highs. The combo chart below shows the three distinct but slightly different 18 month consolidation patterns starting at the June of 2013 low. The top chart shows the HUI that has yet to put in a 6th reversal point in it's big consolidation pattern. It doesn't have to have a 6th reversal point as it already has enough but if it does the top rail would come in around the 240 area.


If you look at the last four weekly bars you can see the closing price for each week are very close to each other meaning there has been very little headway being made either up or down aggravating the bulls and bears alike. Also the 18 month consolidation pattern is expanding unlike GLD which is falling and contracting and SLV which has a triangle. The GLD chart in the middle shows the price action touching the top rail completing the last reversal point number six and falling away. SLV on the bottom chart has been clearly the weakest of the three as it broke out of its triangle in September of last year. Three weeks ago SLV paid a visit to the bottom rail of its triangle as a backtest and is falling away. So we have the HUI in no mans land right now with GLD finding resistance at the top rail of its falling wedge and SLV finding resistance at the bottom rail of its triangle consolidation pattern during the backtest three weeks ago. This combo chart gives you a good overview of where we're at and where we've been.

HUI Gold Bugs Index Weekly Chart

Now I would like to do an in depth report on the HUI starting with the 2 hour chart, in linear scale, and focus on what we have in place at the moment. The first chart pattern is the double bottom that started to form in November of last year with the second bottom coming in late December. I've measured the double bottom price objective using the black arrows. Just measure the distance of the first two black arrows and add that distance to the breakout point on the double bottom which gives us a price target to 212 which the HUI has achieved. Since the first reversal point the HUI has been chopping out the blue triangle. At this point we still don't know if it's going to be a consolidation pattern to the upside or a 5 point reversal triangle to the downside. If the HUI breaks out to the upside then I would have to view the blue triangle as a consolidation pattern which would be a halfway pattern. To get the price objective we would measure the distance from the breakout from the double bottom trendline to the first reversal point in the blue triangle. We then take that distance and add it to the breakout of the blue triangle which would give us a price objective up to the 238 area or the top of the falling expanding wedge I showed you on the combo chart above. If that is what the markets want to give us then we'll take it but first we have to see the breakout of the blue triangle.

HUI Gold Bugs Index Daily Chart

The four horsemen are still all crossed to the downside.

HUI Gold Bugs Index Chart

If the HUI is going to get to the 240 area then it has some overhead resistance it's going to have to deal with first. Below is a weekly chart for the HUI that shows some fanlines made off the 2008 crash low. The HUI is currently testing fanline #4 with the bottom rail of the blue triangle just overhead at 220. The red circles shows where the backtests took place in the past which is common with fanlines.

HUI Gold Bugs Index Weekly Chart 2

Now I would like to show you some fanlines that began at the 2000 bear market low. Fanline #1 showed up when the 2008 H&S top broke down. Fanline #2 came into play when the massive H&S top gave way in 2011. Fanline #3 gave way last September when the blue triangle broke down. A backtest to the underside of fanline #3 would come in around the 220 area, green circles.

HUI Gold Bugs Index Weekly Chart 3

Below is another weekly chart for the HUI that shows a downtrend channel that the HUI is currently testing from below.

HUI Gold Bugs Index Weekly Chart 4

Below is a slightly different look at the downtrend channel that I originally showed you about 4 or 5 months or so ago. It's what they call a double downtrend channel where you have an outside trendline, dashed, on both sides of the main downtrend channel. As you can see the HUI is now in its third week of testing the outer black dashed trendline from below. The higher pink shaded area shows the first impulse move down in time and price. I've added the lower pink shaded area, which is exactly the same size as the higher one, that may show us where to look for the ultimate low in November of this year.

HUI Gold Bugs Index Weekly Chart 5

Now I would like to show you some long term charts so you can see where the HUI has been and where it may go in the future. This next chart for the HUI shows its entire history going all the way back to 1995. Note the huge bottom that formed in the late 1990's that gave the HUI the energy to have a 10 year bull market. You can see the smaller blue triangle consolidation patterns that formed during the bull market years. Next you can see the beautiful and symmetrical H&S top that reversed the 10 year bull market that has led to our most recent low. Note how much different the chart looks when you compare the left side bull market years to the right side bear market years.

HUI Gold Bugs Index Monthly Chart

Below is a monthly candlestick chart that shows you when you're in an impulse move either up or down. When you see a string of white candle, all in a row, you know your in an impulse move up and when you see a string of black candle you know your in an impulse move down. When you see a mixture of black and white candle you know your probably in a consolidation zone as the present picture shows.

HUI Gold Bugs Index Monthly Chart 2

Lets look at one last long term monthly chart for the HUI that shows the bull market took on the shape of a rising wedge. Note the breakout in April of 2013 that took out the neckline of the massive H&S top and also took out the bottom rail of the rising wedge in one big long bar. That's been almost two years ago already. There is little doubt that we're in a bear market it's just that these consolidation and backtesting phases can be long drawn out affairs. As you can see during the bull market years the same thing happened going up. A bull market is much easier to trade because one can hold on to your stocks if you didn't catch the exact low, which nobody does, and wait for the next leg up to get you back in the game. So we wait for further clues to help guide us in this never ending quest to slay the PM Dragon . All the best...Rambus

HUI Gold Bugs Index Monthly Chart 3

All the best

Gary (for Rambus Chartology)

http://rambus1.com

FREE TRIAL - http://rambus1.com/?page_id=10

© 2015 Copyright Rambus- All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Rambus Chartology Archive

© 2005-2017 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

Catching a Falling Financial Knife