CHART OF THE DAY – $HUI (Gold Bugs Index)

$HUI (Gold Bugs Index)
$HUI (Gold Bugs Index)
I said one doesn’t need to chase the rally during the second leg, any gains would not be sustainable and would be given back.

At the low yesterday miners had already given back 62% of the second leg gains, and we are not done with the Intermediate Cycle Low yet. The final Intermediate Cycle Low isn’t due until late June or early July. This is why it wasn’t critical to chase the second leg, one was going to get a second shot at it anyway.

Unfortunately I suspect too many traders listened to the pie in the sky nonsense that passes as analysis and bought at the top and are now suffering a 10% draw down that they didn’t need to weather, and it’s going to get worse before the Intermediate Cycle Low is finished.

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43 thoughts on “CHART OF THE DAY – $HUI (Gold Bugs Index)

  1. Gary Post author

    And don’t tell me that it’s easy to weather a 13% drawdown. That’s complete BS. Folks everywhere were pissing in their pants just last week at the 3.7% drop in the stock market. Most were convinced a bear market had begun.

  2. Anthonyo


    Great chart and analysis; do you foresee HUI perhaps reaching down to the 100% Fib line in the end at ICL?

    1. Anthonyo

      Yes Gary, we need lots of diapers(or DEPENDS) around here for the usual suspects soiling themselves at the slightest deviation and then nagging at you with their childish tantrums.

  3. JetFuel

    So go back and look at your video:

    You clearly state numerous times that you “guarantee” the market will at least re-test the consolidation zone which you highlight in blue between 170 and 180 on the HUI in June. You said it, you pointed it out, and you guaranteed it…..not me.

    So…if it turns out the swing low isn’t in June and actually was Wednesday and prices go on up from here to make new trend highs, will you at least admit you were wrong? I feel the charts much better support my alternative theory than yours. Just look how the $USD, gold, and the euro are all set up bullishly to support a liftoff in the PM sector from here. If you are wrong and there never is a pullback to your consolidation zone highlighted in April, will you just tell your subscribers to never enter the PM market because someday, maybe years from now you will get a chance at a better entry? All this because you had to be right instead of rich?….demanding that the market hand you an opportunity 10% lower so you can re-enter at levels where you sold?

    1. Anthonyo

      This doesn’t make any sense whatsoever, just nagging and throwing mud is all.
      See what I mean? Order the Depends now.

      1. Don

        Anthonyo, belittling others because they have a different viewpoint is just childish. Gary doesn’t need your constant sucking up to sell his subscription service. His track record speaks for itself. If he doesn’t want anyone to disagree with him, he should just flat out say so and block anyone he doesn’t want on the forum.

        1. Anthonyo

          Dom why don’t you mind your own business. No one asked for your opinion. I suggest you don’t suck up to everyone here and stay in your stable.

          1. Anthonyo

            Don, you are a busy body. Nagging and being a pest is a fact. And you are part of it too. Just zip it and stay in your cage.

    2. JetFuel

      and I don’t mean the $USD is bullish….I mean it’s rolling over here and euro and gold are poised to move higher over the next few days. The turn is on but you don’t see it Gary.

      1. Gary Post author

        Jeez how many times must we do this? How many I told you so’s must I dish out before you folks figure it out that I know what I’m talking about?

        The dollar is not rolling over here. It has to at the very least break the intermediate trend line before the intermediate cycle can top. And there is no way the dollar tops or the euro bottoms ahead of the Brexit vote. Just use a little common sense.

        And yes there is going to be at least one counter trend move along the way. Nothing goes in a straight line.

        1. Robert

          Might not get no bounce again. Gold getting smoked! Holiday weekend might be below 1200 come Tues

          1. Gary Post author

            Yes it looks like the dip was only a half cycle low in the dollar, and the swing was fakeout number one for gold. As I’ve noted, the daily cycle has evolved to the point where there is typically 1-3 fakeout swings before the real DCL is struck.

  4. crawfordnews

    Is the S&P going to see 2100 tomorrow? so TV crowd are joyful and people spending $ during the holiday weekend??

  5. chrisG

    Stupid jetfuel just like to argue. Gold is tanking again. These guys just don’t get it. There’s gonna be big fib retracement, not shallow. And what IF Gary is wrong??? So be it. Grow up. He doesn’t owe you a damned shit. He is no god. Bound to get sometimes wrong. So u mean if he is right, you gonna give him half your profits????

    1. Don

      Chris says “And what IF Gary is wrong???” Gary does a good job but he doesn’t have a crystal ball. Over the years, Gary has been wrong on more than a few occasions. That is why it isn’t wise to sell ALL one’s gold and silver positions based solely on one man’s predictions. If he had been wrong and there was no re-tracement, then you would have nothing to profit from.

      1. Gary Post author

        My suggestion was to hedge long positions, not sell. The whole purpose of holding Old Turkey is to move the trade into a capital gains tax bracket. The hedge will help one weather an ICL and not sell at the bottom.

        1. Surf City

          Exactly. Good advice Gary.

          But this is also a Bull Market and I also believe you can have both Core Old Turkey positions along with some trading positions. Bull Markets very often surprise to the upside and having a Core allows you to participate in those surprises without trying to get cute by trading an missing a move.

          This is especially true if your core is in Mico Miners that are likely to get acquired (e.g. like Lakeshore Gold and Kaminak which I had and were bought out).

  6. chrisG

    The high probability trade is Gold @ 1170-1180, gdx @19.50-20!!! Hui @170. Come on, max pain theory!!! lol.

    And yes, when index drop 3%, traders panicked. They say for miners, they are in for long haul. But when it drops 10% , their stomach is painful. Once it goes to 30% drop its going to hurt them so much, they are going to sell. We have all been through this havent we??? I am such as A$$OOOO . lol

    Thats why i am trying hard to avoid such shit and sell when its time to sell. I would rather take profit even at slightly lower prices, buy back higher during that plunge. As long as my second trade makes big buffer profits fast. Much better than going through pain.

  7. vand

    10% is not even a haircut after such a big run-up. The markets tend to do what fewest people expect. I almost suspect we are heading for a big decline down to HUI-140 to set up a classic bear trap as the markets do their best to take as much money from the most people as possible.

    1. Gary Post author

      A test of the 200 DMA is absolutely possible. 3 weeks ago no one believed there was any possibility of that happening… except me. I believed because of how far the miners had gotten stretched above the 200 DMA. Instead of listening to my emotions I looked at it logically. A market that is stretched 75% above the 200 DMA is likely to regress very sharply back to the mean. The rubber band is simply stretched too far.

      Of course the nitwits that were completely lost in the emotional euphoria were predicting this time would be different and miners would never correct again and gold was going straight to $1400.

      Clearly one is better off paying attention to common sense here on the SMT than the pie in the sky nonsense billed as analysis by many other sites.

  8. tulip

    poor al korelin believes we have been waging mayhem & war,slaughter
    for our ‘freedom’…..

  9. chrisG

    Theres a level that gold absolutely cannot visit. I think its 1110. If it goes there, this bull is 90% over. So when u long at big fib retracments, you could give some allowance here and there. But once 1110, please give up

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