GLD, SLV, HUI, GG - October 11, 2009

Gold and silver had a very good week.

Technically, everything looks good for the yellow metal at this moment.

If the bullish count is correct, we may be near the end of Minor wave 5 = Intermediate wave 3. If so, any correction should ideally not overlap the top of Intermediate wave 1.

It is also possible to argue for a more bullish outcome and say what I have counted as Minor waves 1 to 4 are Minute wave parts of a larger Minor wave 1, which would lead to a substantially larger Intermediate wave 3.

But first things first. If my bullish count is correct, I like price to absorb sellings and stay within its larger trend channel.

This is a 60-min chart

We may be close to a complete wave structure. That’s about the only thing negative that I can say about the charts above at this time.

I just would like to remind you that gold is at a new high. That means that there are no unhappy customers waiting to get out at even.

Minus the new price high, same arguments as above hold for silver as well

Pay attention to where Intermediate wave 1 is. That holds an important key to whether we have a bullish wave structure or a counter trend move within a larger bearish picture.

This is a 60-min chart of silver futures


And this a 60-min chart of SLV


They are almost the same in terms of price, definitely the same wave structure.

For SLV, I have a target of 18.50, and then 19. I have support around 16. After that, 15.50 is a must hold.

There we have them. Very clean charts, and well-defined areas/levels of support.

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Last time I talked about HUI was the post of October 6. At the time, I showed a breadth chart and said that it looked OK and had room to go

This is an updates version of that chart

HUI did advance for two days, bettered the September high intraday before settling slightly back.

I must say that I am a bit disappointed. With Gold garnering so much attention, I would have expected the miners as a group to get overbought and make a new high that would stick for some time.

Technicals look OK. I just have a feeling that the group is weaker than it should be given the jubilation of gold bugs.

On Thursday, I posted a minute chart of GG with an ongoing day trade setup.

This is the follow up chart

It traded nicely down in a channel. Notice how impulsive the three down swings were, and how corrective the upswings looked.

Stepping back a bit,


It is possible that the short term correction is over. If so, the 41.50 area should hold. If not, I shall pay attention to the gap area between 39.50 and 40.

Looking at a daily chart

I really do not like the fact that GG is still in the lower half of the channel. If we are really dealing with an Intermediate wave 3, then I’d like to see some upside price acceleration.

If the market tops and corrects, gold miners may suffer. If so, they may suffer worse that the metals. Keep an eye on relative performance of miners versus the metals!