Gold stocks roar

June 6, 2017 HUI

Today the HUI climbed 11.71 points closing at 204.55 from yesterday's close of 192.84.

I have been watching the HUI for the past several days and have been concerned that the mining stocks had not been following gold and silver higher. Today, is a day of reconciliation, the HUI finally caught up. Is this the start of something big or just the market getting in sync.

I like to trade mining stocks and ETFs. Gold always offers an excellent trading opportunity because it is volatile and volatility means trading opportunities and this year has been great for that. I have made money and lost money being both long and short.

I closed all my long positions back on May 7,2017 having entered around March 6, 2017. In too early and out too early. Since then the HUI went from a low of 181.13 on March 8th to a high of 216.55 on April 13th. After that the HUI has been down with the most recent low of 180.02 on April 4th. So the question is are we starting a new bull run or are we still in for more downside?

I think the next few trading sessions will be very telling.

A case for the Bulls as I see it begins on that low on April 4th. From there the HUI climbed to 203.6 and began its climb several days before Gold bottomed on April 9th, all good stocks leading the metals. However until today the mining shares have been in retreat. Gold is hitting new highs and silver is following upwards but still very much down from its recent highs. The stochs and macd are turning upward which is always a good sign for further advancement.

What bothers me is that the high back on February 8th of 222.97 has yet to be taken out. In my opinion we are just retracing the move from last December's low. Short term (ie a 4-5 day trade) is tomorrow a day to go long. For me, no it would just be chasing the market after a big move which is never a good idea. I think I might take a small entry if there is a close above 206 and keep a tight stop loss, with adds at 216 and 223.

A case for the Bears is all about the retracement from the December to February move. In addition, the end of June and beginning of July is usually the time and season for a low.

My sense is that we are due for a change in trend soon but is it now? Please share your thoughts