Are We There Yet?

Talk about a wild ride for the gold mining stocks today. In the opening hours, the HUI Index of Gold Mining Stocks dropped down the shaft and hit a LOW of 180.66, a drop of around 13 points from yesterday's close.

Well that is always a nice way to start your day! A great way to start the day if you were SHORT the HUI Index.

Sometimes it does not matter how the day starts but rather how it ends. And just like a roller coaster the ride ends pretty much where it started with the HUI closing only down 2 points from yesterday's close.

Actually, a very impressive move by the BULLS, so does that mean we are there yet?

I can't say that we are there yet, as the DOWN TREND remains intact with a series of LOWER LOWS and LOWER HIGHS.

Now, that being said, I am keeping my eye out for the development of perhaps, and I do mean perhaps, a change in the TREND.

The way I see it, is today's action was very impressive how the mining shares were bought up. So here is what I am looking for as a POSSIBLE change in the TREND.

The last LOW on the chart is 172.86 which came in on September 26th.

IF, and that is a HUGE IF, the prior low is not broken in the next few sessions AND the BULLS can take out the prior HIGH of 211.89 on a very strong upward movement, then we just might get a nice rally and a change in trend.

I am watching this very carefully because if those two things happen the HUI will have formed an inverse head and shoulder pattern.

No one knows the future, and this is just what I am looking for in the future. That being said the trend remains DOWN.

Gold had a similar day as the mining shares and remains in a DOWN TREND.

Silver continues to trade sideways. Silver did try to break the DOWN TREND early last week, and then got monkey hammered back down into neutral with a CLOSE today of $18.81.

So with COMEX SILVER trading around $18.80 per ounce surely the price of bullion has dropped and there are much lower premiums.

But alas . . . no such discounts are available for physical silver.

source: JM Bullion

The last time I posted the price for an American Eagle was two weeks ago and COMEX silver closed that day at $18.80 essentially the same price as today. See what I mean about sideways action in silver.

But look at the price for the same Eagle two weeks ago.

source: JM Bullion
Full Post:Are We There Yet?

So as you can absolutely see, the price of silver on the COMEX is going nowhere BUT the premiums on American Eagles are going up!

Something to think about.

Peace out and stack on!