Housing and the HUI
posted Jul 27, 2006 at 03:57AM
Housing Index Daily
Technically the index is coming off some nice divergences so this bounce will last a little longer I think, I certainly would not make any long bets here as I think it will be hard-pressed to break over its 50 dma.
More importantly if the HGX is not going down, it is a better bet that the HUI will be going up.
I think those who took cash out of the launch tube and bought the intraday reversal are in pretty good shape. I would suggest that a move over 340 is required to confirm that another leg up is underway. 380 would be a minimum target.
HUI vs HGX
HGX and the HUI is still correlated in terms of "direction" but certainly not in relative strength. Indeed regular readers will know that I am of the opinion that the correlation will break down at some point with gold continuing its bull, while housing will embark on a bear market.