I am not a soothsayer or swami. The HUI-Gold ratio is bullish. That does not mean I am predicting anything. It means my capital is deployed in alignment with the risk/reward odds implied by this and other gold sector charts.I am asking readers to get past the stage of guru worship (especially in the gold sector) and use concepts like risk v. reward and their own two eyes. And a b/s detector too. I am asking readers who have not yet done so to elevate their game. We are late in the 4th quarter and it is 4th and long to get into range for the field goal that will win it.
I have received feedback lately that I do not write in a manner that is understandable by the masses. But judging by the level of monthly re-ups by NFTRH subscribers and from many of the emails they have sent, there are people in tune with my approach. I am asking general readers out there in cyberspace to consider the concept of risk v. reward and the idea that nobody knows exactly what is going to happen. Take charge of YOUR financial fate. Take responsibility and do not submit to know-it-alls.
So, preamble complete, we turn to the HUI-Gold ratio chart. It is bullish for a bottom feeder like me. MACD and TRIX are within a whisker of doing something very bullish by getting above zero. At the same time, if the downtrend line is broken this will be some very nice confirmation. Of course, the closer we get to major signals the greater the chances of a shakeout reaction as traders become more excited.
One scenario - just pure speculation - that I can see happening is an eventual rise to the noted red dotted line and then a decline as broad stocks resume their bear market and liquidation round 2 hits the economy later in '09. I could see HUI-Gold and nominal gold stocks making a higher low at that time, given what should be readily obvious positive fundamentals. But first we will watch for a bullish near to intermediate term to play out.
This is a bullish chart. Now let's see what reality has in store for us.
