Gold and Gold Stocks – Is the Correction Finally Beginning?

by Pater Tenebrarum
Acting Man

Triangle Thrust and Reversal

In mid April, we discussed weekly resistance levels in the HUI Index. Given the recent almost blow-off like move in the index and its subsequent reversal, we decided to provide a brief update on the situation. First, here is a daily chart comparing the HUI, the HUI-gold ratio and gold:

[…] After building another triangle, the HUI has delivered an upside thrust in the direction of the preceding trend. This is quite normal, and so is the subsequent move back to its origin. Three things are noteworthy here: 1. in terms of the HUI-gold ratio, the recent decline is already the strongest of the entire rally since the January low; 2. the downturn hasn’t violated the short term uptrend line just yet; 3. the peak was put in exactly on the day on which gold confirmed the rally in the HUI by breaking out to a new high for the move as well – click to enlarge.

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