We have been patiently looking for the HUI to explode to the upside for some time now, however, the HUI continues to flirt with the sub 600 level and the breakout remains as elusive as ever. Taking a quick look at the chart we can see that the possibility exists for the formation of three higher 'Lows" which would be positive for the gold producers. The RSI and the MACD are middling for now, but have the room to go higher if gold breaks out of its current trading range.
(The HUI is the AMEX Gold BUGS (Basket of Unhedged Gold Stocks) Index represents a portfolio of 14 major gold mining companies.The Index is designed to give investors significant exposure to near term movements in gold prices - by including companies that do not hedge their gold production beyond 1 1/2 years.)
The end of the month, end of the quarter etc, brings an end to book squaring and the generation of reports for those 'high net worth' clients that need to be serviced. Once into next week we should see a gaggle of profit hungry fund managers on the prowl for the next entry point into the precious metals market. That entry point requires an ignition of some sort, whether it be the dollar's fall through the '76' level, another unsavory world event, the raising of the debt ceiling in the United States, we just don't know what it will be, but the there are a number of venues that could host such an event.
Whilst you are pondering the debt ceiling, have a read of this clip from www.zerohedge.com :
Like clockwork, the Treasury placed $35 billion in 5 year bonds with the usual suspects. While the high yield was the highest since May 2010, at 2.26% there was nothing particularly notable about this auction, which saw a 2.26 Bid To Cover, continuing the trend of a gradual trendline ever higher, with Direct bidders taking down 11.2%, the highest since November, Indirects jumping to 42.4% from 34.2% last month which was the lowest in two years, and Primary Dealers eating up the balance. The bond came with a 1.5 bps tail to the When Issued which had been hugging 2.246%. What is far more eventful is that with yesterday's $35 billion 2 Year auction, today's $35 billion in 5 Years, and soon, tomorrow $29 billion in 7 Years, total US debt subject to limit will be $14.258 trillion: just one auction away, or $35 billion, from breaching the debt ceiling. Also, the total debt, not just that subject to the ceiling, could pass the legal threshold as early as tomorrow (pro forma for settlement).
So, maybe we are already there on this issue, to extend the debt ceiling or not to extend the debt ceiling, that is the question!
You may also want to take a look a debt clock to see the grand total and the speed at which it is moving along with a number of other fast moving figures such as the debt per citizen, etc. We not saying that this clock is correct about everything but it sure projects a scarey picture, – try this link
Over in the Options pit, our model portfolio has managed an average return of 41.23% per trade, 68 closed trades, 66 closed at a profit, or a 97% success rate. Average trade open for 42.76 days.
A gentle reminder for those of you who are still thinking about it, prices will double as of 2nd April 2011, but will remain as is for existing subscribers, join us now while this bargain lasts.
The above progress chart shows our performance when profits are re-invested, however, to see exactly how it is going, please click this link.
So, the question is: Are you going to make the decision to join us today, before we decide to cap membership.
Stay on your toes and have a good one.
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