The HUI ended lower -3.09 points (-1.47%) with a close at 206.46. On the daily chart, both the fast stochastic and slow stochastic are descending. The K line of the fast stochastic entered into oversold territory. MACD maintains a negative crossover of the Signal line, but both remain above the zero mark. Divergence is down and below the zero mark.
GLD ended lower -$0.95 (-0.75%) with a close at 125.61. On the daily chart, both the fast stochastic and slow stochastic are descending. The K line of the fast stochastic entered into oversold territory. MOST IMPORTANTLY, the slow stochastic is now out of overbought territory. MACD maintains a negative crossover of the Signal line, but both remain above the zero mark. Divergence is down and below the zero mark.
SLV ended lower -$0.13 (-0.77%) with a close at 16.76. On the daily chart, both the fast stochastic and slow stochastic are descending. The K line of the fast stochastic entered into oversold territory. The K line of the slow stochastic is now out of overbought territory. MACD maintains a negative crossover of the Signal line, but both remain above the zero mark. Divergence is down and below the zero mark.
The main purpose of this blog is to show that the HUI trades in a very orderly fashion in both "time" and "price". I publish daily target numbers well in advance to demonstrate this orderly fashion. If the HIGH, LOW or CLOSE is within 0.50 points of the daily target number it is a "hit".
For the second day in a row, the Bull target number of 206.37 was "hit". Today it was hit at both the LOW at 206.24 (-0.13 points) and at the CLOSE at 206.46 (+0.09 points). Please recall that this number was first published back in July based upon the low of July 10th. If the market traded in accordance with the "random walk theory", as most economists and financial advisors will tell you after charging a very hefty fee; how is it possible that this number shows up at the LOW and the CLOSE today? This number was generated by a simple mathematical formula. How is it that the following was posted here back on September 1st? :
"I have previously mentioned that I expected a significant HIGH in the HUI would be hit between August 17th and September 6th. September 6th is next Wednesday, I will stick with this call until proven otherwise. Does a significant HIGH mean that the HUI implodes, not necessarily. If this is a new "Bull" market, then it could be just a retracement back to perhaps the 206.37 level, that the HUI sliced through back on August 28th."
I know I quoted this yesterday, but are you not at least intrigued? I am not selling you anything. I am simply sharing with you an idea that is contrary to what most people, even well compensated professionals, believe about the market. For two days in a row 206.37 has provided obvious support in the HUI. It is as if there is a hidden hand. Read the Bible, it is in there, all the mathematics and time cycles. Perhaps, we as the created should reacquaint ourselves with the Creator.
For tomorrow, look for the Bears to try and continue this downward thrust. The "gap" at 201.94 posted on August 25th is still in reach. For the Bulls, the goal is to maintain contact with 206.37. This portion of the move is getting a little long in the tooth, so the Bulls may be able to hold off the onslaught for at least another day. Even if the Bulls can have an up day, barring unforeseen circumstances, it is still too early to go long.
I remain short the HUI but closed a significant portion of these positions after doing some "day trading" in the morning. Remember, I have a bad habit of buying too early and selling too soon. So do not be surprised if the HUI continues down with me mostly on the sidelines.
Concerning GLD and SLV, keep an eye on the slow stochastic. The slow stochastic came out of overbought territory in GLD today. Unless the Bulls can quickly regain that position, this sell off will gain traction. The K line in SLV is out of overbought territory. These are warning signs that this move lower has some more energy to run lower.
These are just my thoughts and observations, not advice etc. Please share your thoughts and observations.
As for Thursday, good luck and happy hunting.