Some of you evidently can’t wait to jump on the gold stocks even though they remain in the throes of a fairly severe correction. For those eager to buy something…anything, we can greatly simplify and perhaps enhance the timing of your intended plunge by closely monitoring two mining-sector bellwethers:  Newmont and the AMEX Gold Bugs Index (HUI). Both have sold off quite sharply since peaking around Thanksgiving, but both have further to go before reaching their respective minimum downside targets. The good news is that the targets are not far off.  Newmont ended yesterday’s session at 41.67, a bit less than $2 above the nearest hidden pivot of significance, 39.72; and the HUI stood at 201.76, which is 2.92 points above its most immediate target, 198.84.

I am making no guarantees that sellers will go into hibernation when these numbers are reached. Indeed, that is why the speculative bids we’ve placed for Newmont and several other mining stocks are tied to tight stops. In any event, NEM looks somewhat more likely than the HUI to bounce precisely where predicted. Whatever Newmont does, though, we should view it in relationship to the HUI, which, as I’ve noted, could fall to as low as 184.65 if the pivot at 198.84 fails to turn it around. My general advice to anyone eager to augment his or her stake in bullion assets is to use the target in Newmont for timing purposes. This means that you should buy whatever it is that you’ve been itching to buy, but not before NEM trades at 39.72 (give or take two cents). Alternatively, you could use the 422.30 target I’ve proffered for February mini-gold. But keep in mind that this is no time to bet the farm. Any buying should be done with a tight stop-loss and with proper deference to risk --hardly negligible right now, given that the dollar is in a rally long overdue.

(Click on image to enlarge)