The HUI ended higher 1.82 points (0.92%) with a close at 199.50. On the daily chart, the fast stochastic has a positive crossover but remains in oversold territory (the K line is trying to move out and sits at 20). The slow stochastic is flat and today (day 3) is now fully embedded in oversold territory. MACD is flat but maintains its negative crossover of the Signal line that is descending. Both the MACD and the Signal line are in negative territory. Divergence is trending upward but is well below the zero mark.
GLD ended higher $0.56 (0.46%) with a close at 123.24. On the daily chart, both the fast and the slow stochastic are flat in oversold territory. The fast stochastic is fully embedded in oversold territory (day 6) a sign of continuing weakness. MACD maintains a negative crossover of the Signal line and both are descending. Divergence is trending upward but remains well below the zero mark.
SLV ended higher $0.02 (0.12%) with a close at 16.05. On the daily chart, the fast stochastic had a negative crossover with the K line descending back into oversold territory. The slow stochastic is descending and is for the second day in oversold territory. MACD maintains a negative crossover of the Signal line and both are descending. Divergence is trending upward but remains well below the zero mark.
When I first began this blog this past Spring, I wrote that I expected a significant LOW in the HUI by July 14th. The LOW came, four days early, on July 10th. This past summer I continuously wrote that I expected a significant HIGH in the HUI by September 6th. The HIGH came, one day late, on September 7th. The summer rally is now, in my book, officially over. Could I be wrong? Yes absolutely, the market is always correct, my interpretation of the market is hopefully mostly correct. Where would I be wrong? If the HUI trades above 222.03 within the next six trading sessions, I will scratch my head and publish a profuse mea culpa. Barring 222.03 in the HUI, the trend has changed, the "summer rally" is over and "the Fall" has begun.
The main purpose of this blog is to demonstrate that the HUI trades in an orderly fashion both in "price" and "time". I publish daily target numbers well in advance to demonstrate the orderly fashion in which the HUI moves. If the HIGH, LOW or CLOSE is within 0.50 points of a daily target number it is a "hit". These numbers are important because if there is a "hit", the market will do one of three things at these numbers. The market will either continue the trend, consolidate at these numbers or reverse the trend. The reversing of the trend is obviously most important because it signals when to enter or exit positions. Below are the daily Bear target numbers for "The Fall", first published several weeks ago:
207.50
204.16
201.16
198.81
194.82
188.53
182.11
178.25
These numbers will show up over the next three months on a regular basis to provide trading guidance. If 178.25 is taken out there are additional lower levels. All these numbers are based upon ratios found within the Bible. Who knew?
Did I say the next three months? Yes sir I said the next three months "time". I had previously published three dates that will play a role in "the Fall". These dates are November 29th, December 6th and December 28th. For purposes of "time" the November 29th date may play a small role, which as we approach that date I will comment on. The other two dates are far more important. So as of today, September 22nd, I post for the first time, I expect a significant LOW in the HUI between December 6th and December 28th. These dates are calculated on "time" cycles found within the Bible. Who knew?
All trading from here until the end of December shall be based upon the assumption, unless proven otherwise, that we are now in "The Fall."
Today the HUI traded in a very tight range with a HIGH at 200.50. The LOW came in at 198.46, which is a "hit" for the daily Bear target number of 198.81 (-0.35 points). The Close came in at 199.50.
For Monday, look for the Bulls to mount a counter trend rally. Be very careful, in a counter trend rally will only last 1-3 days. In fact today's action might be counted as day one. If the Bulls can take out today's HIGH the next targets are 204.16 and 207.50. If the Bulls can manage to hit the 207.50 level it would also fill the "gap" at 206.01 that formed on September 15th. There is also a "gap" at 214.94 that formed on September 8th. If that gets filled, then this would be one heck of a counter trend rally. Which would probably end with one of the greatest Bull traps of all time. Going long at this juncture, i.e. anywhere under 222.03, is a gambler's choice. For the Bears the goal is to take out today's LOW and drive the HUI down to 201.16.
For the remainder of "The Fall", I will utilize the following protocols: 1) short positions will be large and held for longer periods of time; 2) the beginning of any counter trend rally will be a time to exit most or all short positions; and 3) if a counter trend rally is bought then the long positions will be small and for a short duration. 4) Always always always "book" profits, no matter how small, along the way in each move.
This is the plan anyway. I have often mentioned sometimes my trading is undisciplined and I tend to buy too early and sell too soon, but I would rather book profits then catch an absolute LOW or ride to an absolute HIGH.
I remain neutral with no positions in the HUI.
GLD and SLV are in the same boat with the HUI, all three need a counter trend rally.
These are just my thoughts and observations not advice etc. Please feel free to share yours.
Enjoy the weekend.
For Monday, good luck and happy hunting.