Best of the Week
Most Popular
1. US Housing Market Real Estate Crash The Next Shoe To Drop – Part II - Chris_Vermeulen
2.The Coronavirus Greatest Economic Depression in History? - Nadeem_Walayat
3.US Real Estate Housing Market Crash Is The Next Shoe To Drop - Chris_Vermeulen
4.Coronavirus Stock Market Trend Implications and AI Mega-trend Stocks Buying Levels - Nadeem_Walayat
5. Are Coronavirus Death Statistics Exaggerated? Worse than Seasonal Flu or Not?- Nadeem_Walayat
6.Coronavirus Stock Market Trend Implications, Global Recession and AI Stocks Buying Levels - Nadeem_Walayat
7.US Fourth Turning Accelerating Towards Debt Climax - James_Quinn
8.Dow Stock Market Trend Analysis and Forecast - Nadeem_Walayat
9.Britain's FAKE Coronavirus Death Statistics Exposed - Nadeem_Walayat
10.Commodity Markets Crash Catastrophe Charts - Rambus_Chartology
Last 7 days
Could Gold Price Reach $7,000 by 2030? - 6th Aug 20
Bananas for All! Keep Dancing… FOMC - 6th Aug 20
How to Do Bets During This Time - 6th Aug 20
How to develop your stock trading strategy - 6th Aug 20
Stock Investors What to do if Trump Bans TikTok - 5th Aug 20
Gold Trifecta of Key Signals for Gold Mining Stocks - 5th Aug 20
ARE YOU LOVING YOUR SERVITUDE? - 5th Aug 20
Stock Market Uptrend Continues? - 4th Aug 20
The Dimensions of Covid-19: The Hong Kong Flu Redux - 4th Aug 20
High Yield Junk Bonds Are Hot Again -- Despite Warning Signs - 4th Aug 20
Gold Stocks Autumn Rally - 4th Aug 20
“Government Sachs” Is Worried About the Federal Reserve Note - 4th Aug 20
Gold Miners Still Pushing That Cart of Rocks Up Hill - 4th Aug 20
UK Government to Cancel Christmas - Crazy Covid Eid 2020! - 4th Aug 20
Covid-19 Exposes NHS Institutional Racism Against Black and Asian Staff and Patients - 4th Aug 20
How Sony Is Fueling the Computer Vision Boom - 3rd Aug 20
Computer Gaming System Rig Top Tips For 6 Years Future Proofing Build Spec - 3rd Aug 20
Cornwwall Bude Caravan Park Holidays 2020 - Look Inside Holiday Resort Caravan - 3rd Aug 20
UK Caravan Park Holidays 2020 Review - Hoseasons Cayton Bay North East England - 3rd Aug 20
Best Travel Bags for 2020 Summer Holidays , Back Sling packs, water proof, money belt and tactical - 3rd Aug 20
Precious Metals Warn Of Increased Volatility Ahead - 2nd Aug 20
The Key USDX Sign for Gold and Silver - 2nd Aug 20
Corona Crisis Will Have Lasting Impact on Gold Market - 2nd Aug 20
Gold & Silver: Two Pictures - 1st Aug 20
The Bullish Case for Stocks Isn't Over Yet - 1st Aug 20
Is Gold Price Action Warning Of Imminent Monetary Collapse - Part 2? - 1st Aug 20
Will America Accept the World's Worst Pandemic Response Government - 1st Aug 20
Stock Market Technical Patterns, Future Expectations and More – Part II - 1st Aug 20
Trump White House Accelerating Toward a US Dollar Crisis - 31st Jul 20
Why US Commercial Real Estate is Set to Get Slammed - 31st Jul 20
Gold Price Blows Through Upside Resistance - The Chase Is On - 31st Jul 20
Is Crude Oil Price Setting Up for a Waterfall Decline? - 31st Jul 20
Stock Market Technical Patterns, Future Expectations and More - 30th Jul 20
Why Big Money Is Already Pouring Into Edge Computing Tech Stocks - 30th Jul 20
Economic and Geopolitical Worries Fuel Gold’s Rally - 30th Jul 20
How to Finance an Investment Property - 30th Jul 20
I Hate Banks - Including Goldman Sachs - 29th Jul 20
NASDAQ Stock Market Double Top & Price Channels Suggest Pending Price Correction - 29th Jul 20
Silver Price Surge Leaves Naysayers in the Dust - 29th Jul 20
UK Supermarket Covid-19 Shop - Few Masks, Lack of Social Distancing (Tesco) - 29th Jul 20
Budgie Clipped Wings, How Long Before it Can Fly Again? - 29th Jul 20
How To Take Advantage Of Tesla's 400% Stock Surge - 29th Jul 20
Gold Makes Record High and Targets $6,000 in New Bull Cycle - 28th Jul 20
Gold Strong Signal For A Secular Bull Market - 28th Jul 20
Anatomy of a Gold and Silver Precious Metals Bull Market - 28th Jul 20
Shopify Is Seizing an $80 Billion Pot of Gold - 28th Jul 20
Stock Market Minor Correction Underway - 28th Jul 20
Why College Is Never Coming Back - 27th Jul 20
Stocks Disconnect from Economy, Gold Responds - 27th Jul 20
Silver Begins Big Upside Rally Attempt - 27th Jul 20
The Gold and Silver Markets Have Changed… What About You? - 27th Jul 20
Google, Apple And Amazon Are Leading A $30 Trillion Assault On Wall Street - 27th Jul 20
This Stock Market Indicator Reaches "Lowest Level in Nearly 20 Years" - 26th Jul 20
New Wave of Economic Stimulus Lifts Gold Price - 26th Jul 20
Stock Market Slow Grind Higher Above the Early June Stock Highs - 26th Jul 20
How High Will Silver Go? - 25th Jul 20
If You Own Gold, Look Out Below - 25th Jul 20
Crude Oil and Energy Sets Up Near Major Resistance – Breakdown Pending - 25th Jul 20
FREE Access to Premium Market Forecasts by Elliott Wave International - 25th Jul 20
The Promise of Silver as August Approaches: Accumulation and Conversation - 25th Jul 20
The Silver Bull Gateway is at Hand - 24th Jul 20
The Prospects of S&P 500 Above the Early June Highs - 24th Jul 20
How Silver Could Surpass Its All-Time High - 24th Jul 20

Market Oracle FREE Newsletter

How to Get Rich Investing in Stocks by Riding the Electron Wave

HUI Index: Bull Pullback or Bear Rally?

Commodities / Gold and Silver Stocks 2015 Feb 17, 2015 - 10:47 AM GMT

By: Bryan_Post

Commodities

Call us Gold Bugs if you wish - it's OK - really.

We have a firm belief that the precious metals, Gold and Silver, are the only real money on planet Earth. We also believe the metals are in a secular bull market that has several more years to run.

Yes, holding these opinions places us in a minority group that is way outside the mainstream of financial "thinking".


Over a beer we might have a conversation with you about the mainstream sheeple and how their blind acceptance of fiat currency will lead them to financial ruin.

But that is a conversation for another day.

Today we want to look at the HUI Gold Bugs Index (our namesake index!) and how it is performing.

Precious metals have been in a downtrend for three years now but a cyclical bear market in the middle of a secular bull market is to be expected - that's how financial markets work. Secular cycles are 10 to 20 years long while cyclical cycles run 1 to 3 years. The cyclical downturn in the precious metals is most likely reaching its end.

So how do we determine when a downtrend has ended and a new uptrend has begun? Let's start by defining terms. A downtrend consists of a series of lower highs and lower lows. An uptrend is marked by a series of higher lows and higher highs.

If we look at the daily chart of HUI below we see that, in the big picture, price has been making lower highs and lower lows - that's the definition of a downtrend. But focus now on the right side of the chart. Notice that since the low in November 2014 price has been making higher lows and higher highs - this meets our definition of an uptrend.

The key question we need to examine is whether this three month old uptrend is the start of a new bull cycle or just a bear market rally in the ongoing bear cycle.

Unfortunately there is no definitive answer to our key question. All we can do is look at the clues available to us and then make an informed decision as to how we want to position our hard-earned capital.

The first clue we have is price behavior. Look at the left side of the HUI chart and notice how price is moving in relatively long, flowing legs. Each of these legs is roughly three months long and there are no definitive price swings within the legs.

Then we get to the right side of the chart and find that price behavior has changed. Instead of legs that are three months long we are now getting legs that are only 2 weeks to 5 weeks long and these legs are creating a series of definitive swing highs and swing lows.

Price behavior changed in November 2014 - that is clue #1 and possibly the most significant clue we have.

Our second clue involves Andrews pitchforks. To draw a high quality fork we need a series of three swing points or pivots. On the left side of the chart we have three obvious pivots and we use them to draw the red, downward sloping Andrews fork in the chart above.

On a shorter time frame there was an upwards sloping fork in early 2014 (chart below) but that fork failed fairly quickly and price resumed its downtrend.

The next opportunity we had for drawing a good and upwards sloping pitchfork came in December 2014 after price made a higher low and then confirmed that low swing point with a move higher. Ironically, the confirmation of this swing low came on December 24 and 26 - quite the Christmas present for Santa to bring to us Gold Bugs.

So that is clue #2: we now have an upwards sloping Andrews pitchfork that is accurately describing the price behavior.

We will continue examining clues tomorrow.

Bryan

Editor-in-Chief, Pitchfork Playground

“When you recall that one of the first moves by Lenin, Mussolini, and Hitler was to outlaw individual ownership in gold, you begin to sense that there may be some connection between money, redeemable in gold, and the rare prize known as human liberty.” ~ Congressman Howard Buffett (Warren Buffet’s father)

© 2015 Copyright Brian Post - 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.


© 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