Zeev's Turnips Patch-No Politics (ZEEV)

[basserdan]

*** Gold related post ***

Yes, the poor performance of XAU/HUI lately relative to POG has greatly disappointed me, but Dan posted an article recently arguing that the trend is still that XAU/HUI are outperforming POG. I can't find that article, but it charted either the XAU or HUI divided by gold and the chart definitely showed that the trend was up.

Here are two links that chart the ratios.

http://stockcharts.com/def/servlet/SC.web?c=$xau:$GOLD,uu[m,a]daclyyay[pb50!b200][vc60][iUk14!Lb14]&....

http://stockcharts.com/def/servlet/SC.web?c=$hui:$GOLD,uu[m,a]daclyyay[pb50!b200][vc60][iUk14!Lb14]&....

The ratio to Gold looks oversold and ready to move higher. The question is, will the ratio move higher as gold drops, or as X/H play catch-up? I still believe that if gold continues higher, X/H will take off sharply. So far that hasn't happened, but we will see. If POG hits $500 in a few weeks, I would expect XAU and HUI to be much higher than they are now.
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Hi Ken,
The relative performance of the HUI and the XAU compared to the PoG has been dismal and, as your charts clearly show, have broken below the 50ma and is a warning that bears close watching.

I fear that if this breach doesn't reverse itself in the next few days the end of this upleg will be upon us and we'll soon be seeing the PoG at much lower levels.

Gold shares usually lead the PoG in both directions and I think the new gold ETF and the abysmal action of the USD is skewing that relationship right now to the point that the cart appears to be leading the horse.

I think next week will be very important as far as to which direction the PoG will aim for.

My guess is down.

Protect yourself in the clinches.

Good luck.