• 255 days Will The ECB Continue To Hike Rates?
  • 255 days Forbes: Aramco Remains Largest Company In The Middle East
  • 257 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 657 days Could Crypto Overtake Traditional Investment?
  • 662 days Americans Still Quitting Jobs At Record Pace
  • 664 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 667 days Is The Dollar Too Strong?
  • 667 days Big Tech Disappoints Investors on Earnings Calls
  • 668 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 670 days China Is Quietly Trying To Distance Itself From Russia
  • 670 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 674 days Crypto Investors Won Big In 2021
  • 674 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 675 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 677 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 678 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 681 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 682 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 682 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 684 days Are NFTs About To Take Over Gaming?
Market Sentiment At Its Lowest In 10 Months

Market Sentiment At Its Lowest In 10 Months

Stocks sold off last week…

Billionaires Are Pushing Art To New Limits

Billionaires Are Pushing Art To New Limits

Welcome to Art Basel: The…

What's Behind The Global EV Sales Slowdown?

What's Behind The Global EV Sales Slowdown?

An economic slowdown in many…

  1. Home
  2. Markets
  3. Other

Metals and Miners Bull Market Point of Recognition

I think that the Metals and Miners Bull Market has just began and we are very close to the point of recognition of a new bull market which should give us an idea of what to expect going forward. As we have already seen in the past the first phase of a bull market is frustrating as many investors usually lose their positions too early and are therefore often left behind. This is how bull market works. Charts are telling me that Metals and Miners are on the verge of a massive breakout which could be the point of recognition of a new cyclical bull market.

On the long term chart the Gold/XAU ratio has reached its Base Pattern Target and reversed to the downside. On the next chart you can see that the Gold/XAU ratio is very close to break below the neckline of a massive Head and Shoulders Pattern and also to break through a 3 year support channel trendline. Once these trendlines are broken, a point of recognition of a new bull market should be valid and a new impulsive leg up in Miners and Metals should be launched. You can also notice that the Gold/Silver ratio chart just broke below its long term support which is a bullish sign for the Complex Metals. Silver is outperforming Gold.

Gold Miners Ratio Chart
Larger Image

Gold/XAU and Gold/Silver Ratio Charts
Larger Image

On the chart below you can see that the Miners Indexes are also on the verge of a breakout of a huge Inverse Head and Shoulders Pattern. This breakout would be also a point of recognition of a new bull market in Miners.

Miners Index
Larger Image

On the following chart you can see that Silver is leading Miners and Gold as it already broke out of a Triangle Pattern and the HUI Index (Miners Index) breakout should be the next one, followed by Gold. Both Miners and Silver are outperforming Gold which is what I like to see in a healthy Metals bull market.

Silver - Miners - Gold Charts
Larger Image

When a point of recognition occurs, price action usually reveals a new bull market which should outperform the other markets. On the following chart you can see that the HUI/SPX ratio broke through a 3 year trendline resistance and is currently forming a possible Double Bottom Reversal Pattern. A break above the upper dashed red trendline would validate this reversal pattern and should bring more investors in the Miners sector. When this breakout happens, the Miners should outperform the SPX Index.

HUI/SPX Ratio Chart
Larger Image

Metal and Miners are currently at a key juncture and are very close to print a point of recognition of a new bull market. Price action will be very important in the coming days to valid this new cyclical bull market. Our first leveraged positions on May 30 in Metal and Miners seem to be taken very close to the bottom and I think that it is not the time to sell these positions but on the contrary, to hang on during corrections in order to run all the bull market and to make nice profits. Keeping in mind the big picture to control our emotions is important at the beginning of each bull market.

 

Back to homepage

Leave a comment

Leave a comment