Tuesday, October 5, 2010


The miners have now joined gold and silver at new all time highs. (Well silver isn't at all time highs but it is at bull market highs.) The entire precious metal complex is now trading in a vacuum with no overhead resistance. This is the only sector in the world that can make this boast.

Needless to say this is a very bullish configuration and one that should lead to massive gains the next 6 months as the dollar collapses down into its 3 year cycle low.
The risk now isn't that we may get a pull back, although we certainly could. No, the risk is that the miners may never trade back below the breakout level again for the duration of this bull market.
Anyone waiting on a pull back to enter runs the risk of missing the entire move because they couldn't adjust their thinking from trading range mode to break out mode.


  1. Toby,

    One blogger I follow in addition to yours has a longer term target on the HUI of 2000. 850 feels great but I want to ride this out until the ultimate top and even then be a reluctant seller. It's such a huge win to see the HUI finally break out, but way overdue. I think it's time the market wake up and start buying these stocks. The world needs more real money and these companiez dig it out of the ground. It just makes sense. Do you think 2000 is reasonable?

  2. I think we probably have at leat tow more complete ABCD waves before the secular bull is finished so yes we could easily see 2000 HUI.

  3. Noah, I know UR asking Toby, but may I add something here for you. I have traded the Gold mkt for a decade now...your question is fine &valid, but whats your time frame?

    Look at chart of HUI in 2003-2004. Hui was at (broke to new highs) from 154 to 258 (WOW)in 6 months,but by month 10 that high was retested at 163..ouch.

    The 258 high was eventually brokenYRS later -Dec 2005..and again 6months later 401!! WOW...7th month later, it hit 270 again as retest...ouch!!

    That NEW HIGH of 401 was broken dec 2007..6months later519!! WOW...remember 2008?? oUCH...now we just took out 519 in 2010...

    lesson is, yeah, from 2003 to 2010 HUI went from 154 to 520 WOW!!! ( but what did we learn in between)? retests can be severe... Toby/Gary has a good handle on how to rack up gains ( and hang on to them)...check the charts tho...maybe a super blow off top (like in OIL) will do a parabolic move like that, but time will tell.

    I humbly submit this as an observation from someone who has been there too.

  4. Yes one definitely has to exit at the top of C-wave's and re-enter at the bottom of the D-wave.

    That being said I doubt we will ever see 500 again on the HUI once this breakout is firmly established. Why? Because this phase of the commodity bull is being led by gold and the miners are not being held back by skyrocketing oil prices like they were during the first phase of the commodity bull.

  5. Toby, gold is in the 10th-week run and well above trend line. How long can it go on before a rest?

  6. Instead of wondering how long gold can go up you should try to figure out how long the dollar can drop as that is what is driving this C-wave advance (it's the same fundamental driver of every C-wave so far).

    The intermediate cycle in the dollar lasts on average about 20 weeks. This wek is week 9 if that tells you anything.

  7. I'd have expected theminer to blast off after the breakout. Yet, they're not blasting off, while silver has
    That's really strange

  8. I think that the breakout has already occured and the pattern of it's movement I think had been one of reluctance. It's kind of like the market is saying "Well ok, I guess I'll buy a mining stock, if I must". But I think the move to new highs here on the HUI is in and like Toby says this thing is going higher. I was in big way before this move over the summer waiting for it and it's great to be here now. I think we just sit back and collect the gains here of about 20 - 30 percent over the next six months in the miners here. The reluctance on behalf of most market participants is great for us because as the whole sector goes up, it'll wear people down and the longer this goes on without total recognition, the trickle up will continue and hopefully for our sakes the denial will continue! The thing I can't get my hands around is this crazy freaking fed. How long can this bond market insanity go on like this? It's almost as if the fed has the intentions to sit back and buy the long end to infinity. That is absolutely sci fi channel insanity. I just can't understand it. It's totally nuts how the fed has resorted to essentially trying the behaviorally condition the market by frontrunning the deflation trade. I truly hope that their control ends soon, very soon.

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  11. When you do your analysis on Gold, do you use the overnight number too, since gold hit something like 1366 overnight...would that be your high when looking at your chart for retracement?

    I ask because we leaped above the channel line and now one of those shorter pullbacks (say $40)only get us back to the top of the channel...(New channel uptrend???) whereas a good $66 drop would retest $1300 breakout...but I also know you are going to say..."dont guess, just watch the dollar " :)

    But golds pullback looks like it would take 2 days to retest $1300, where the dollar could bounce to .80, but looks like it would take a week or more :) maybe only time would tell...I want to add to my positions. thx

  12. I'll keep subs appraised of when I think the gold cycle has bottomed if you want to add. I think we will probably test $1300 and there is a chance we could test the breakout at $1265 although the odds aren't great for that to happen.


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