HUI Fib Studies
posted Jul 8, 2006 at 02:17PM
Current HUI Daily Chart
Past corrections of major uplegs
Potential Targets of an entire bull market correction
Just some planning charts. If you notice most corrections of major uplegs do at some point reach the 61% retrace point as the low.
The exception was the correction in the second half of 2001. If you were in golds at that time you will remember that gold was nowhere on anyone's radar screens yet...only the hard-core gold bugs and some contrariarian speculators were at play at that point.
It does suggest that once this up-leg is finsihed that the HUI will undergo another downleg which would reach the 255-260 level.
If the chart broke that support then it would imply that this correction is not just taking care of the last major upleg but the entire bull market to date.
The case for that? Well oil looks to be heading to new highs. High oil prices is seen as price inflation but the underlying impact of high oil is that it acts as a drain on global liquidity.
The PTB then, acting as inflation fighters then keep raising rates which just adds ammuntion to the deflationary environment.
As you may have read the major central banks, have at least publicly made a show of tightening things up simultaneously.
If this is the case then I would suggest that the 50% fib retrace, which also corresponds to major trend-line support, be seen as a likely down-side target.