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Wednesday, October 05, 2011 9:05:20 PM
Mining Shares Bear Trap?
* Wednesday, October 05, 2011
From the Chart Book, and the “Hope We Don’t Jinx it Again” department: The recent attempted breakout to the upside by the AMEX Gold Bugs Index (HUI) turned into a bull trap right after we commented on the breakout in these pages. “Obviously” our commenting on it jinxed it, so we provide the comments below with a full measure of trepidation and only AFTER taking the appropriate anti-jinx countermeasures … ahem! (No we are not really superstitious, it’s just a quaint icebreaker.)
As shown in the graph below, the HUI traveled below all implied support (a little), which constitutes a breakdown attempt. As we write in the late going on Wednesday, September 5, the HUI is rallying back up to above a roughly 490 implied support line. Nicely above it, actually.
(HUI, 1-year, daily. If any of the images are too small click on them for a larger version.)
As of this minute we have the makings of a bear trap (a failed breakdown). If the HUI continues to hold and/or move higher it will mean we have seen it confound both trend-jumping bulls and bears inside a two-week period. “You just don’t see that very often.”
Judging by the aggressive action in the smaller issues on our monitors, The Little Guys are also catching more of a bid, which is to be expected from such an oversold condition. Just below is the Market Vectors Junior Gold Miners Index or GDXJ as a proxy for The Little Guys.
(GDXJ, 14-month, daily)
The panic downside momentum has at the very least paused as of today, apparently, but the underperforming small resource companies sure have a long way to go to even get close to being “in the game” again.
http://www.gotgoldreport.com/2011/10/mining-shares-bear-trap.html#more
George.
* Wednesday, October 05, 2011
From the Chart Book, and the “Hope We Don’t Jinx it Again” department: The recent attempted breakout to the upside by the AMEX Gold Bugs Index (HUI) turned into a bull trap right after we commented on the breakout in these pages. “Obviously” our commenting on it jinxed it, so we provide the comments below with a full measure of trepidation and only AFTER taking the appropriate anti-jinx countermeasures … ahem! (No we are not really superstitious, it’s just a quaint icebreaker.)
As shown in the graph below, the HUI traveled below all implied support (a little), which constitutes a breakdown attempt. As we write in the late going on Wednesday, September 5, the HUI is rallying back up to above a roughly 490 implied support line. Nicely above it, actually.
(HUI, 1-year, daily. If any of the images are too small click on them for a larger version.)
As of this minute we have the makings of a bear trap (a failed breakdown). If the HUI continues to hold and/or move higher it will mean we have seen it confound both trend-jumping bulls and bears inside a two-week period. “You just don’t see that very often.”
Judging by the aggressive action in the smaller issues on our monitors, The Little Guys are also catching more of a bid, which is to be expected from such an oversold condition. Just below is the Market Vectors Junior Gold Miners Index or GDXJ as a proxy for The Little Guys.
(GDXJ, 14-month, daily)
The panic downside momentum has at the very least paused as of today, apparently, but the underperforming small resource companies sure have a long way to go to even get close to being “in the game” again.
http://www.gotgoldreport.com/2011/10/mining-shares-bear-trap.html#more
George.
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