In a premium post of September 6, I presented a weekly chart of HUI and said
“notice that I can also draw an expanding megaphone formation as I have done with blue lines. Miners have been the laggards of the PM area. They may breakout and become leaders, but if I play just for or from a breakout of the laggards, I would try to book partial as soon as I can (using daily and 60-min charts) to reduce my cost in case the breakout is just a last gasp of rotation from metals into lagging miners before a more serious correction unfolds in the area.
None of this changes anything longer term for me as far as keeping a core in metals or select miners is concerned. This is just about trying to make some sense out of the shorter term moves and manage any possible short-term trades“
This is the weekly chart of HUI now
Hindsight is, of course 20/20. and it more looks like a the megaphone (if not worse) than a good breakout to infinity and beyond. But we were ready for this, first by thinking of the possibility of a megaphone for the laggards, and then by setting a certain level as I wrote in the premium post of September 8, as I wrote for HUI
“I think it is important for price to stay above 600, or, if I am a bit lenient, above 580-600″
This is what has since happened
This is what has since happened
The first drop broke a short-term downtrend but held the 580 area and attempted a bounce. I typically draw another trend line in situations like this. The bounce failed to make a higher high, the second drop cut the second short-term gapped below second trend line and 580 area and it was like: See You Later to all who were trapped buying the top for a break out. Such was the force of the drop that even a short on Thursday gap down would be profitable nicely on Friday for a one-day trade.
The rest of this post is reserved for subscribers of Market Time Premium
For full regular market analysis, subscribe to premium content at
Market Time Premium
Investing in the financial markets can involve considerable risk. Past performance is not necessarily an indication of future performance. All information included in Market Time Premium reflects ongoing thoughts of Market Time authors about market-related issues, and is prepared for educational purposes, and is presented as authors’ observations, and is not a solicitation, or an offer to buy or sell any security or use any particular system. Information is based on historical research using data believed to be reliable, but there is no guarantee as to its accuracy. Market Time Premium, its author(s), and its affiliates do not represent themselves as acting in the position of an investment adviser or investment manager. Market Time Premium, its author(s), and its affiliates shall not provide you with personally tailored advice concerning the nature, potential, value or suitability of any particular security, portfolio or securities, transaction, investment strategy or other matter. From time to time, Market Time Premium, its author(s), and its affiliates may hold positions in securities mentioned, but are under no obligation to either divulge or hold