HUI: The Illusionist's Trick Left Investors Speechless

Keep in mind though: scenario #2 most likely requires equities to participate. In 2008 and 2020, sharp drawdowns in the HUI Index coincided with significant drawdowns of the S&P 500. However, with the Fed turning hawkish and investors extremely allergic to higher interest rates, the likelihood of a three-peat remains relatively high.

If we turn our attention to the GDX ETF, lower highs and lower lows have become mainstays of the senior miners’ recent performance. Moreover, while the GDX ETF’s swift drawdown occurred on significant volume, the recent bounce hasn’t garnered much optimism. As a result, we’re likely witnessing a corrective upswing within a medium-term downtrend.

Please see below:

Finally, comparing the current price action to the behavior that we witnessed in 2012, back then, the GDX ETF corrected back to the 38.2% Fibonacci retracement level and then continued to make lower highs before eventually rolling over. And today, the senior miners are displaying similar weaknesses. Gold stocks are declining even while correcting, and the lack of meaningful upswings signals that the current environment is very bearish.

In conclusion, while gold, silver, and mining stocks will attempt to pull rabbits out of their hats, the bunnies’ bounce will likely fade over the medium term. Moreover, with the precious metals searching for a magic bullet that likely doesn’t exist, another disappointment could leave investors without an ace in the hole. The bottom line? While gold, silver, and mining stocks will likely dazzle the crowd in the years to come, their wizardry could resemble black magic in the coming months.

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Disclaimer: All essays, research and information found on the Website represent the analyses and opinions of Mr. Radomski and Sunshine Profits' associates only. As such, it may prove wrong ...

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Almoni33 3 months ago Member's comment

I like your articles, but sometimes you write vaguely and long like a 1well-known Polish writer and not like a trader

Almoni33 3 months ago Member's comment

2 I'm sorry to see that you used a logarithmic chart scale - it's for kids but not for traders

3 chart replaces 1000 words. focus on the informativeness of the chart.

stop loss - target - etc.

all best