Recap for Fri., Aug 13 and What to Expect Next Week

While the GLD etf closed up 1% on the week, the GDX miners etf closed down 1% again. I continue to think we are close to a turn higher in miners that could usher in a very significant rally, and Friday might prove to be the start as miners managed to close strong. If members caught my last post mentioning James Flanagan’s analysis at Gann Global, they know the next big rally could be a multi-year, several hundred percent gain. He uses the HUI index (Gold Bugs Index) for analysis and believes the support around 247 could prove very important, a flush lower would be a washout, clearing out stops and setting the stage for the next bull. He has been quite accurate in the past, so I don’t take his projections lightly, it would be great to experience this rally, but also he thinks the HUI goes lower first, breaks below the 247 level in a panic style collapse that gets bought up heavily by the professionals. I’m not wild about riding miners lower first, but at this stage there is more risk in missing the upside bc jumping out, only to try jumping back in at the exact correct moment. I will stick with positions and let our stops decide if we stay in the position or not. Even if we are stopped out, we will look to get back involved on a rise BACK ABOVE that 247 level on the HUI index. Here is the MONTHLY HUI chart with the horizontal trendline at 247. To be exact, the HUI did break below the old lows, but only by about 30 cents, and we would be hoping for a more obvious break to really scare longs out of positions.

The GDX etf will confirm a cycle low with a close abo e $32.87, and closed only a nickel below that on Friday. My hunch is that it’s quite likely, note the stochastics just beginning to exit the oversold zone with force.

So the situation is starting to improve for our miners, now is NOT the time to sell, in my opinion. However, when we hit stop levels, we will exit as our discipline requires. It can hurt at times, for example our recent stop out of FreeGold Ventures (FVL.TO) occurred, only to see the stock rebound 7% on Friday! We are getting close enough to the bottom that we prefer not to be stopped out of any more shares, we want to own as much as possible for the impending rally. Let’s see what the new week brings.