HUI at an all time high

Gold and silver shares are moving strongly higher at noon EDT. Based on what I have been seeing this past week, it appears that the ratio spread trades which have kept so much pressure on this sector for the last two years are finally coming off.

I have long suggested that if the hedgies wish to play the spread trade game with the mining shares, use them as the long leg of their spread against a short against the broader market. That would have been a far more profitable trade than plying shorts against the mining shares when the primary trend in the precious metals is higher.

We'll see if they remain stubbornly wedded to this trade or continue further unwinding and attempt a new and more profitable strategy.