Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Eiro-group Review –The power of trading education - 4th Dec 20
Early Investors set to win big as FDA fast-tracks this ancient medicine - 3rd Dec 20
New PC System Switch On, Where's Windows 10 Licence Key? Overclockers UK OEM Review (5) - 3rd Dec 20
Poundland Budget Christmas Decorations Shopping 2020 to Beat the Corona Economic Depression - 3rd Dec 20
What is the right type of insurance for you, and how do you find it? - 3rd Dec 20
What Are the 3 Stocks That Will Benefit from Covid-19? - 3rd Dec 20
Gold & the USDX: Correlations - 2nd Dec 20
How An Ancient Medicine Is Taking On The $16 Trillion Pharmaceutical Industry - 2nd Dec 20
Amazon Black Friday vs Prime Day vs Cyber Monday, Which are Real or Fake Sales - 1st Dec 20
The No.1 Biotech Stock for 2021 - 1st Dec 20
Stocks Bears Last Chance Before Market Rally To SPX 4200 In 2021 - 1st Dec 20
Globalists Poised for a “Great Reset” – Any Role for Gold? - 1st Dec 20
How to Get FREE REAL Christmas Tree 2020! Easy DIY Money Saving - 1st Dec 20
The Truth About “6G” - 30th Nov 20
Ancient Aztec Secret Could Lead To A $6.9 Billion Biotech Breakthrough - 30th Nov 20
AMD Ryzen Zen 3 NO UK MSRP Stock - 5600x, 5800x, 5900x 5950x Selling at DOUBLE FAKE MSRP Prices - 29th Nov 20
Stock Market Short-term Decision Time - 29th Nov 20
Look at These 2 Big Warning Signs for the U.S. Economy - 29th Nov 20
Dow Stock Market Short-term and Long-term Trend Analysis - 28th Nov 20
How To Spot The End Of An Excess Market Trend Phase – Part II - 28th Nov 20
BLOCKCHAIN INVESTMENT PRIMER - 28th Nov 20
The Gold Stocks Correction is Maturing - 28th Nov 20
Biden and Yellen Pushed Gold Price Down to $1,800 - 28th Nov 20
Sheffield Christmas Lights 2020 - Peace Gardens vs 2019 and 2018 - 28th Nov 20
MUST WATCH Before You Waste Money on Buying A New PC Computer System - 27th Nov 20
Gold: Insurance for Prudent Investors, Precious Metals Reduce Risk & Preserve Wealth - 27th Nov 20
How To Spot The End Of An Excess Market Trend Phase - 27th Nov 20
Snow Falling Effect Christmas Lights Outdoor Projector Amazon Review - 27th Nov 20
4 Reasons Why You Shouldn't Put off Your Roof Repairs - 27th Nov 20
Further Clues Reveal Gold’s Weakness - 26th Nov 20
Fun Things to Do this Christmas - 26th Nov 20
Industries that Require Secure Messaging Apps - 26th Nov 20
Dow Stock Market Trend Analysis - 25th Nov 20
Amazon Black Friday Dell 32 Inch S3220DGF VA Curved Screen Gaming Monitor Bargain Deal! - 25th Nov 20
Biden the Silver Bull - 25th Nov 20
Inflation Warning to the Fed: Be Careful What You Wish For - 25th Nov 20
Financial Stocks Sector ETF Shows Unique Island Setup – What Next? - 25th Nov 20
Herd Immunity or Herd Insolvency: Which Will Affect Gold More? - 25th Nov 20
Stock Market SEASONAL TREND and ELECTION CYCLE - 24th Nov 20
Amazon Black Friday - Karcher K7 FC Pressure Washer Assembly and 1st Use - Is it Any Good? - 24th Nov 20
I Dislike Shallow People And Shallow Market Pullbacks - 24th Nov 20
Small Traders vs. Large Traders vs. Commercials: Who Is Right Most Often? - 24th Nov 20
10 Reasons You Should Trade With a Regulated Broker In UK - 24th Nov 20
Stock Market Elliott Wave Analysis - 23rd Nov 20
Evolution of the Fed - 23rd Nov 20
Gold and Silver Now and Then - A Comparison - 23rd Nov 20
Nasdaq NQ Has Stalled Above a 1.382 Fibonacci Expansion Range Three Times - 23rd Nov 20
Learn How To Trade Forex Successfully - 23rd Nov 20
Market 2020 vs 2016 and 2012 - 22nd Nov 20
Gold & Silver - Adapting Dynamic Learning Shows Possible Upside Price Rally - 22nd Nov 20
Stock Market Short-term Correction - 22nd Nov 20
Stock Market SPY/SPX Island Setups Warn Of A Potential Reversal In This Uptrend - 21st Nov 20
Why Budgies Make Great Pets for Kids - 21st Nov 20
How To Find The Best Dry Dog Food For Your Furry Best Friend?  - 21st Nov 20
The Key to a Successful LGBT Relationship is Matching by Preferences - 21st Nov 20
Stock Market Dow Long-term Trend Analysis - 20th Nov 20
Margin: How Stock Market Investors Are "Reaching for the Stars" - 20th Nov 20
World’s Largest Free-Trade Pact Inspiration for Global Economic Recovery - 20th Nov 20
Dating Sites Break all the Stereotypes About Distance - 20th Nov 20

Market Oracle FREE Newsletter

FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

AMEX Gold BUGS Index Chart and Analysis

Commodities / Gold and Silver 2013 Feb 25, 2013 - 07:04 AM GMT

By: David_Petch

Commodities

The following article was posted one week ago with analysis of the AMEX Gold BUGS Index (HUI), except the chart has been updated. Below is the only Figure present in this update, with further explanations of what each coloured line represents. Potential outcomes for the HUI are examined, with the strongest being to the upside rather than downside. Upside targets are discussed and what must happen for them to be met.


Weekly Chart of the AMEX Gold BUGS Index

In order to address where the HUI is, I have taken the monthly chart and added parabolic curve lines to indicate support/resistance lines. A blue parabolic line was drawn over all the major tops from 2002 until 2011. An upper black parabola was drawn to include the 2008 and 2011 top, followed by the lower 2012 high. Finally, a lower black parabola was drawn to include the 2005 and 2008 lows.

The two black parabolas intersect around August 2013, with current lower support at 345...a close below this level on the monthly chart would invalidate this analysis and trigger a move lower. At present, the HUI is now down for the fifth consecutive month that follows a two month rally. Trader time frames vary and my personal is following 6-8 month trends...based upon the anomaly we are in, I will provide signals going forward for tops on the weekly charts for those that wish to trade in and out of positions. For resistance, a move above 450 would signal a move out of the parabolic arc congestion zone would signal a strong move to the upside.

The US Dollar Index has been going sideways for months, which has been difficult in establishing a definable pattern...one comes to an end and it extends further. Based upon current positioning, it could extend into late March, but stochastics suggest 2-3 weeks at best...a move to late March would create an overbought condition. As such, the sideways price action in the Dollar has affected the price of gold, which in turn has affected the precious metal stocks, which is the primary cause of HUI having an extended decline.

The next parabolas that intersect are the upper blue and lower blue lines that intersect in mid 2014. Based upon the Contracting Fibonacci Spiral, a top in gold is expected now between August and October 2013, given the fact a turn around has not occurred so this will translate into a limited period of time for an upside move in precious metal stocks. Given the HUI declined to 380, the upside is likely to be capped at 520-525. This may sound like a move with limited upside or positive intonations, but one thing that this chart does indicate however, is that a decline to the 2008 lows has a lower degree of probability for occurring, given the length of the present decline What the chart does suggest however, is a continuation of a narrow trading range in the HUI until late 2014.

Two different cycle waves, one in purple and one in green denote two potential start points for the HUI back in 2001. I personally go with the purple starting point, which ties into the Elliott Wave counts illustrated at the top. By chance, the purple line terminates around mid 2014, which illustrates an equivalent period of time between waves a (2008 high) and the expected termination point of wave b currently forming. Wave b should be at least equivalent or longer in time compared to wave a for the proposed Elliott Wave count to be accurate. One other point to consider is if two waves are equivalent in price, then the subsequent wave should be equal to both segments. Although gold is set top peak in 2020ish, precious metal stocks may have their huge moves after and extend into 2025-2026.

To zoom back into the current time frame of present, I highlighted a green circle that illustrates the lower 21 MA Bollinger band falling beneath the 34 MA Bollinger band. This observation has been in effect for two months now...back in 2008, this lasted for around the same period of time before the index reversed to the upside. This suggests that a bottom is due within the next 3-4 weeks and although not shown on the chart below, refer back to the HUI update that shows the weekly chart has a bottom no later than the end of March.

If things go as expected, there should be a bounce up to around the 515-525 level to complete wave [D]...not that it could go higher, but this will that will be dependent upon how far the US Dollar declines. Wave [D] can not be shorter than wave [A] (from 2008, which was 4-5 months, depending upon how it is counted), so the upward move that is pending should be over 4.5 months. Once a top is reached in this coming move, it will be suggested to lighten up, as the coming Contracting Fibonacci Spiral top of the broad stock market indices is due no later than May 21st, 2013 (A comprehensive article will be published in the April 2013 issue of Technical Analysis of Stocks and Commodities that provides the most recent findings for this cycle). The CFS cycle has been in effect since it started in 1932, so there is highly probable to remain in force until proven otherwise.

Following the wave [D] top later this year, expect wave [E] to see a sideways trending pattern within the parabolas until mid to late 2014. What this indicates is a very sharp upward trend occurring between late 2014 and 2020ish, that should have a trajectory much like 2001 until 2008, only much higher in price. The only way to be in the game is to be invested in the game. Continue to be invested in high quality gold and silver stocks in politically secure locations around the globe that pay dividends. Only 20% or less of a precious metals portfolio should be allocated to exploration companies or emerging producers in order to minimize risk.

I will update oil, gold and the XOI later on today, as this article took significantly longer than anticipated. Also, I will update health care companies we are following, that still do not indicate tops until sometime between May and June 2013, which happens to coincide with the Contracting Fibonacci Spiral top.

Ownership of gold and silver bullion should be accumulated and held until the expected 2020 top, which will be an aid to capital preservation. I do want to again stress that the CFS cycle is pointing for a very sharp inflationary spike that tops out no later than August to October of this year (maybe November if the US Dollar Index continues to avoid correcting) which subsequently ties into the CFS cycle. If the HUI takes out 525, then it raises the possibility of a doubling from current levels, or 700-720, but again, this will be dependent upon market conditions at that point in time.

The main theme of this article is to illustrate where the HUI is within its pattern and how it remains confined to the parabolic arcs. A break below 340 would have bearish implications, but as noted from analysis on the monthly chart or daily and weekly charts, a bottom is expected within 2-4 weeks. An over extension of the downside move is only increasing the upside target.

One final Elliott Wave count not shown due to scale is that wave [C] completed in May 2012 and wave (B).[D] down is nearing completion before wave (C).[D] rises to complete a flat (3-3-5)...this count has as much of a probability for being correct as the current labelling scheme, so please keep this in mind.

One final item to address are stochastics 1, 2 and 3 shown below in order of descent. The %K in stochastics 1 and 2 have been in a down trend for nearly two years, which has created an oversold condition. There is no indication of a reversal in trend based upon stochastics from the monthly chart, but the daily and weekly charts do indicate a bottom within 2-4 weeks.

Only time will tell if we get a very sharp spike of inflation as expected before events unfold as expected as defined within the CFS cycles...that is all for now..back later on tonight, with an update of oil, natural gas and the AMEX Oil Index.

By David Petch

http://www.treasurechests.info

I generally try to write at least one editorial per week, although typically not as long as this one. At www.treasurechests.info , once per week (with updates if required), I track the Amex Gold BUGS Index, AMEX Oil Index, US Dollar Index, 10 Year US Treasury Index and the S&P 500 Index using various forms of technical analysis, including Elliott Wave. Captain Hook the site proprietor writes 2-3 articles per week on the “big picture” by tying in recent market action with numerous index ratios, money supply, COT positions etc. We also cover some 60 plus stocks in the precious metals, energy and base metals categories (with a focus on stocks around our provinces).

With the above being just one example of how we go about identifying value for investors, if this is the kind of analysis you are looking for we invite you to visit our site and discover more about how our service can further aid in achieving your financial goals. In this regard, whether it's top down macro-analysis designed to assist in opinion shaping and investment policy, or analysis on specific opportunities in the precious metals and energy sectors believed to possess exceptional value, like mindedly at Treasure Chests we in turn strive to provide the best value possible. So again, pay us a visit and discover why a small investment on your part could pay you handsome rewards in the not too distant future.

And of course if you have any questions, comments, or criticisms regarding the above, please feel free to drop us a line . We very much enjoy hearing from you on these items.

Disclaimer: The above is a matter of opinion and is not intended as investment advice. Information and analysis above are derived from sources and utilizing methods believed reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Comments within the text should not be construed as specific recommendations to buy or sell securities. Individuals should consult with their broker and personal financial advisors before engaging in any trading activities as we are not registered brokers or advisors. Certain statements included herein may constitute "forward-looking statements" with the meaning of certain securities legislative measures. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the above mentioned companies, and / or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. Do your own due diligence.

Copyright © 2013 treasurechests.info Inc. All rights reserved.

Unless otherwise indicated, all materials on these pages are copyrighted by treasurechests.info Inc. No part of these pages, either text or image may be used for any purpose other than personal use. Therefore, reproduction, modification, storage in a retrieval system or retransmission, in any form or by any means, electronic, mechanical or otherwise, for reasons other than personal use, is strictly prohibited without prior written permission.

David Petch Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules