I posted this on the 'Your Economy' board and I wanted it here for any future reference...
Back in 2000, gold equities declined initially with the markets off the top, and then when the bear was kind of "confirmed," that was when the HUI bottomed... soon after that. I am just going off of history, and kind of going off of the $USD at the same time, it appears to have more "juice" in it, quite the "dead-cat" bounce if I must say so myself.
The recent $GOLD strength might be a hangover from the France & Dutch no votes to the EU constitution as well as typical end of the month strength in the futures contracts...
If we look at NEM, arguably the bellwether for the $GOLD equities, we can see the red "bear" bars far exceed the black "bull" bars on the volume chart... this volume trend has been in tact since the recent $46.51 high back in March... I haven't seen any evidence that this volume trend has shifted, this gives further evidence to my thoughts going forward.
Granted & if it's any consolation, I'm obviously still super mega bullish on $GOLD and $GOLD equities going forward, I believe we will see the day where $GOLD is recognized as true currency, thus the $GOLD reserves in the ground of the properties of these companies will be viewed as real money and the valuations will eventually far suceed those of both banks and oil companies... but for the short-term, I would expect $GOLD equities to lead the way down since they haven't yet had the blatant market divergence I've been so patiently waiting for...
On a side note, today's NEM candlestick confirms my thoughts on the HUI (that it hit a top today)... - #msg-6557986 (copy of this post is below the charts)
*FYI & an IMO post on the HUI and $GOLD, I think it may have topped out today, check candlestick... and I wouldn't rule out $GOLD doing one last jiggle and dance with sub-$400/ounce or the HUI at least double-bottoming if not heading to about 140-160... after that it's all systems go, $GOLD is clearly in a bull market and the manipulation and printing of paper currencies is going to lead to an inevitable crisis with a rainbow at the end of the storm in which the whole system is uprooted and people with spiritual integrity institute a new & brighter system which will be 100% honest... we just have to get through the early fireworks first...
An interesting thing, however is that $GOLD bottomed at $375 when the HUI last bottomed out at 163.81 back in May 2004, I could see it retesting that level but I don't expect it to go lower, and if it somehow did, it would be brief, I do expect a brief stint under $400 though, my point is it's more possible for the HUI to hit new lows then it would be for $GOLD to do the same, in other words, this upcoming low on the HUI... if it happens is going to be the buy of the decade...
sell the housing bubble and put it all into physical $GOLD and gold equities at the coming bottom ;) - Not a bad idea at all...!!!
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