Gold stocks are breaking down
Ever since the $HUI made a new high at 400 in May, I have been warning about the bearish divergence, which unless /until it is corrected, will have negative impact for gold stocks.
My breakout model broke down in May, and again this week, and in the process, established a down trend resistance. Traders should be short or in cash until this resistance is violated.
The head & shoulder topping pattern from my last commentary has now completed the right shoulder. A break of the neckline and the downside target for the $XAU is 100.
220 for the $HUI.
$28 for the GDX.
Conversely, an upside target for the SPPIX would be $40.00
SPPIX - we had a buy signal on 7/20 and bought this bear fund at $29.76, and we shall exit this trade on a violation of support currently at $28.40 and rising. The risk is 4.5% and with the upside target at $40 which is 30%, odds are very favorable.
There you have it.
My job as an analyst is done. My job as a trader is also done. We shall now leave it in the hands of the market Gods, and accept whatever the outcome is. Time to go fishing.