Comments: A trendline break in the HUI that's now been confirmed by the XAU and the GDX. Also, the HUI is now trading below its 200 day MA. Not great. I find it also interesting that the XAU, which contains some miners who still have hedges, has been outperforming the HUI. I hope it doesn't portend anything. Anyway, we are in the middle of the holiday season now, so it's probably better not to read too much into the action right now, but nevertheless the chart is what it is. and it's not wonderful. The good thing is that there's now some pretty solid lateral support down to about 310.
Comments: the Gold:XAU chart shows the recent outperformance of gold against the Miners. That RSI downtrend break may be significant. I'm guessing we may see a break of the downtrendline from October. Considering that Gold is down only a $1 or so from 3 days ago, the miners have really been taking it on the jaw the last few days!
When you have a moment, please check out Jan Allen's provocative December 21 entry in his Age of Tyranny Blog. Jan argues that mining stocks are set to decline as Gold rises. "The precious metal mining stocks, which has been the premier means of wealth accumulation and preservation and accumulation, have failed," he writes.
I don't necessarily agree with the analysis, although I am aware that the mining shares' leverage to gold has been decreasing over time in this bull market. We are now also in tax selling season which is another factor that helps to explain the mediocre action in the miners. But the action is what it is, and during the last few days, Jan's analysis has been correct so I don't think it can be ignored.
No comments:
Post a Comment