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.
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.