• 545 days Will The ECB Continue To Hike Rates?
  • 545 days Forbes: Aramco Remains Largest Company In The Middle East
  • 547 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 946 days Could Crypto Overtake Traditional Investment?
  • 951 days Americans Still Quitting Jobs At Record Pace
  • 953 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 956 days Is The Dollar Too Strong?
  • 956 days Big Tech Disappoints Investors on Earnings Calls
  • 957 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 959 days China Is Quietly Trying To Distance Itself From Russia
  • 959 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 963 days Crypto Investors Won Big In 2021
  • 964 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 964 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 967 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 967 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 970 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 971 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 971 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 973 days Are NFTs About To Take Over Gaming?
  1. Home
  2. Markets
  3. Other

Mining Shares in a World of Hurt

The HUI is coming unglued on the charts with the index falling below long term chart support at the 200 day moving average in today’s session. It had not been below that key technical indicator since early February of this year.

We are also now seeing the 50 day moving average and the 100 day both moving lower.

HUI Gold Bugs Index Daily Chart
Larger Image

More importantly, the ADX line, is now beginning to rise as the price moves lower. This is ominous as it suggest, NOT CONFIRMS - that the possibility of a trending move lower in the shares is underway.

HUI Gold Bugs Index Daily Chart 2
Larger Image

The index is a mere 6 points away from having retraced exactly half of the entire move up this year. You can see that 50% Fibonacci retracement level coming in near 192.

That really is the last line of defense for the bulls. They either hold it there or it is non unreasonable to expect a move all the way back down to 170.

The other problem with the mining share weakness is that it is telegraphing more losses in the gold price itself. Look at how sharply the HUI/Gold ratio is now falling.

HUI/Gold Ratio Daily Chart
Larger Image

The one saving grace that I see in the gold area is the fact that the reported gold holdings in GLD have yet to experience a substantive drop. Look out if that starts to happen.

We have a payrolls report due tomorrow morning for the month of September. If it is strong, gold is not going to hold. The only hope for the bulls right now is that the report is weaker or weaker than the average pre-report guess.

By the way, First Majestic, cannot get any upside traction.

First Majestic Silver Daily Chart
Larger Image

This suggests that silver has further yet to fall.

It is amazing to me to watch a stock lose 60% of its value in the matter of 2 months.

 

Back to homepage

Leave a comment

Leave a comment