With gold’s bull-market correction now in its thirty-fifth day, investors in mining shares and precious metals are eager to know whether prices are likely to turn decisively higher any time soon. To save on guesswork I’ve reproduced a chart below of the Gold Bugs Index (HUI). It shows the precise location of four hidden-pivot supports, each capable of producing a dramatic turnaround -- or at the very least, a tradable bounce.

(Click on chart to enlarge)

As you can see, all of the prospective supports are relatively nearby. The topmost hidden pivot implies a further fall of 2.4 percent; the lowermost, of 11.8 percent. The most promising of them, 284.40, implies a decline of 4.4 percent. Because these are hidden pivots rather than conventional technical supports, we should be able to tell how much further the HUI has to fall by watching how it interacts with each successive pivot. A rule of thumb in this instance is that, if a hidden pivot is exceeded by more than 0.05 points within 15 minutes of when it is first touched, the next pivot is likely to be reached. In any event, each should show discernible support – enough, presumably, to permit bottom-fishing on the way down using very tight stop losses. As noted above, 284.40 is the most promising of the lot.

A caveat: Call options in the HUI are much too illiquid to trade, so you’ll have to substitute another vehicle if you plan to play. A component of the index itself should suffice for this purpose, and it could therefore be any of the following: Bema Gold (BGO), Newmont Mining (NEM), Kinross (KGC), or Hecla (HL). Some other stocks included in the HUI, which comprises a basket of unhedged gold stocks, include Agnico Eagle (AEM), Eldorado (EGO), Gold Fields Ltd (GFI), Meridian Gold (MDG), Coeur d’Alene (CDE), Harmony Gold Mining (HMY), and Freeport Mcmoran Copper & Gold.