Gold Bugs Index

The strong rally that unfolded over the summer was not impulsive on the weekly chart, and if you display it one the daily it becomes merely a "duel" between bulls and bears, with alternating impulse legs in either direction.  What this implies is that we shouldn't get too excited if HUI embarks on a sharp rally over a stretch of perhaps 3-4 days.  Even so, we can treat the 491.04 p midpoint resistance of the pattern shown as real, and even look for a camouflage entry opportunity on the long side if it's decisively penetrated.  If you're not that patient, it will still be possible to enter more or less at will, leveraging bullish impulse legs on charts of lesser degree well before the midpoint is reached. Since the entry signal at x has already been tripped, your trading bias should be bullish anyway. _______ UPDATE (January 13 at 1:22 a.m. EST): After a pre-Christmas, whoopee cushion bounce from around 420, this vehicle settled back into a rut. Now, however, it is bullishly impulsive on the hourly chart, with immediate potential to 442.99 (see inset). This target will  become an odds-on bet if and when buyers push HUI past its sibling midpoint at 435.69.

The Gold Bugs Index looks very likely to fall to at least 402.46, the 'D' target of the pattern shown. The p midpoint support of this authoritative pattern lies at 433.38, and because it has already been exceeded by six points, it is probably just a matter of time before the implied 8% drop gets under way. Bulls would get a reprieve and perhaps a new lease on life with an impulsive rally that exceeds the two labeled peaks, but anything that falls short of that would likely be just noise.

If there's to be a hopeful sign, look for it at 439.27, the Hidden Pivot midpoint of a pattern that projects to as low as 348.74. My hunch is that a breach by as little as perhaps 1.50 points would send the Gold Bugs Index down to lows made two years ago in search of support. They come in around 380 and outweigh any Hidden Pivot supports that would apply beneath the midpoint.

Corrective weakness met support yesterday at the 508.33 Hidden Pivot shown, but if it fails, look for more downside over the near term to at least 502.91. Speculative buying would be in order there, stopped as tightly as 502.79. Looking at a bigger picture, the bull trend appears healthy and robust, since 'external' peaks are getting surpassed with each new thrust. A crucial test awaits, however, a little more than 10% above, near peaks around 555 recorded in February.  You can learn to “camouflage trade” yourself.  Click here for a free trial to Rick’s Picks.

From a Hidden Pivot perspective, this vehicle has been outperforming GDXJ recently, suggesting institutional enthusiasm for larger-cap mining stocks is heating up.  Notice that the apex of last week's surge slightly exceeded  a key peak at 484.93 recorded back in April. This not only refreshed the bullish impulsiveness of the daily chart, it did so by way of a 10% rally that required no b-c 'breathers'.  We'll attempt to board the next leg up using a pattern similar to the one shown in the chart.  If you want to be notified in real time of any opportunities that may arise, please sign up for E-Mail Notifications on your My Account page.

The 389.71 target of the bearish pattern shown is so sharply defined that the so-far small overshoot seems extremely likely to produce still lower lows.  For starters, we should use the 385.17 midpoint pivot of the pattern shown. Its breach, by more than 0.05-0.10 points would portend still more slippage to 364.53. Want to learn how to do this stuff yourself? Click here for a free trial subscription to Rick’s Picks.

The weight of the pattern shown looks sufficient to push this vehicle down to at least 419.00, the 'D' target shown. However, buyers will still have a chance to turn things around at the 432.23 midpoint support. If it is breached by more than a hair on first encounter, that would shorten the odds of a swift follow-through to the lower number, a Hidden Pivot.  Since this could play out in many ways, I'll leave it to resourceful Pivoteers to figure a way on board.

Friday's impressive surge brought this vehicle to within a hair of the 447.16 target we looked at during a recent online tutorial session. That is neither bullish nor bearish per se, but it wouldn't take much more to re-fortify buyers for a sustained move. Specifically, bulls need only hit 458 to knock off five prior peaks on the hourly chart. These are shown in the inset, along with last week's push to D=447.16.

The Gold Bugs Index has done all we asked of it and more, refreshing the bullish vitality of the hourly chart with a push past an 'external' peak recorded on May 4.  We can use a Hidden Pivot at 436.40 (see inset) as a minimum upside objective for the near term, but if HUI should pull back to the 414.37 midpoint associated with that number, Pivoteers can try bottom-fishing on the 5-minute chart or less. ______ UPDATE (May 30, 1:20 a.m. EDT):  From a recent high of 433.02, HUI has pulled back to within less than a point of the 414.37 midpoint flagged above. The implication is that this vehicle has bottomed and can be bought via camouflage. I suggest using the one-minute chart to reduce theoretical risk to a minimum.