Keep an Eye on Precious Metals

On Wednesday, the Amex Gold BUGS Index (HUI) set a new closing high of 485.9, besting the 480.99 mark that was set in January. The intraday high of 491.58 was also a record. With this new high, it is almost certain that we are in the middle of wave (3) of iii of 3 of III, first suggested here.

In Elliott wave jargon, wave 3 is the most sustained portion of a 5 wave advance; more so for iii of 3, and so on. If this is the case, then the advance of Precious Metals [PM] mining stocks in the next two months is likely to stun all but the most devout gold bugs.

What is very tellingly is that both ratios of HUI:Gold and Silver:Gold have been trending up which is an indication that the move in precious metals is gaining recognition, and speculative fervor is brewing.

click to enlarge

Comments

[ballsschweaty]

The key to trading is to spot the moves before they occur and then sell into the speculative fervor. I'm a seller of metals into this parabolic move. Only sheeple chase vertical charts.

[Los Pepes]

I've been a technical trader since I was 18 years old (20 years ago...). The precious metal investments I've been making for the last 3 years are seriously the first time I have ever made investments based solely on fundamentals, and not supply-and-demand investments either, but out-of-control goverment fundamentals and unsustainable standard of living fundamentals.

I started buying gold the day (no kidding, the same day) that I noticed that most of my neighbors made half as much as me (or less), but had houses that cost more than mine and drove cars that cost 4 times as much as mine.

I've noticed that generally speaking, many people seem to think that they're entitled to these things, income be damned, and the federal gov't and the FED seem to support that view.

I guess what I'm getting at is this: I don't care what the chart does, not only am I holding, I'm buying more. And if the price of silver drops back down to $4 an ounce and the price of gold $280, I'll smile ear-to-ear as I'm trading stacks of paper for real money. This rouse has gone on long enough, we produce next to nothing and walk around acting entitled to everything. How long do you think that can continue?

[User 158429]

Lospepes,

Thats the best article I have read in a long time.

Well done