Quick post since I am still without the capability of publishing NFTRH effectively (thank you for your ongoing patience with this situation!)...Since the Dollar's rise went hand in hand with asset declines, I have been watching USD and its topping pattern from strenuously over bought levels. The projections from last week's charts are playing out beautifully and the break of the neck line and SMA50 imply some significant downside for the Dollar to the targets noted on the charts lower on the page.
Bears implore that there is more liquidation to come, 'BEWARE' they say, lower stock market lows are in the offing. Gold stocks will get sucked down too.
Well, we continue to get confirmations to the contrary. The stock market maintains its bottoming stance and the HUI has had a weekly close above significant resistance at 250. The short term target could reach 300. But if Huey holds above 250 over the next few days then the 340 area comes into play as more significant resistance. If 250 fails, we will look for support at 225 to do the trick.
Of utmost importance is the MACD, which has finally risen above zero. Seasonally, the end of year tax selling season will be winding down and at some point pre-announcements of improved gold mining fundamentals should be leaking out. I currently hold all the favorite miners mentioned in NFTRH11 along with several others. I will look to take some profit along the way but expect a nice run for several months, which is why I personally plan to ride this thing for a while. Pure traders will be doing what they do.
I still lean heavily toward the idea that we caught a significant multi-year bottom at HUI 150.27 and I will not give up those positions lightly. It was not easy to be buying then and it is not easy to release those positions since they remain very far below what I think will come to be known as fair value over the next couple or few years. My very preliminary gameplan however calls for lower lows in the market later in 2009 and that could drive gold miners down to a higher low in any round 2 liquidation frenzy. So, some profit taking is in play until the broad market view becomes more clear.
As a side note to NFTRH subscribers, I did end up buying the Equadorian gold stock that was featured in Otto's NOBS report with NFTRH11. Got a really nice price too. Never chase gold stocks. Wait for 'em to come to you.
