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Reason to Stay Optimistic on Gold

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The 13 week cycle up phase aborted early and the pullback has negated the base breakout. When that happens there’s usually a recovery before a second high that confirms the top. I want to remain optimistic that this will only result in a mild correction/consolidation. As long as the 10-12 month cycle indicators continue to signal an up phase, that’s where I’ll give the benefit of the doubt.

Here’s what the current up to the minute charts say about that (subscriber version).

The HUI mining stock index 6 month cycle is probably topping out. But with the 10-12 month cycle due to stay in an up phase for at least 12 more weeks, I’ll give the benefit of the doubt to the 6 month cycle down phase playing as a consolidation, rather than deep decline. The parameters to watch on that are here. (subscriber version).

Today, there are 2 buys and 13 sells from the swing trade screens of 52 gold mining stocks. This followed 2 buys and 6 sells last week, on the heels of a flood of buy signals the week before. That suggested the possible onset of a new upleg.  Now we’re in a correction.

Could it be something worse? Maybe, so I’m putting stops on all picks, but with a little wiggle room to allow for a little more dipping and then hopefully recovery. I’ll see on the recovery if it’s too weak, and close out picks where the charts call for it. But for now, I want to give them time to allow for recovery.

Current open picks got crushed with the sector as a whole, ending the week with an average gain of just 14.1% on an average holding period of 41 calendar days. That was down from an average gain of  21% with an average holding period of 34 calendar days.

I didn’t see any charts I wanted to add this week. I will stick with existing picks, with stops added as shown on the table.

See table and charts (subscriber version).

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