"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat

Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput


Monday, April 18, 2011

HUI so far is holding support

Approximately two weeks ago to this date, the gold and silver mining shares experienced a tremendous wave of short covering along with some new buying. Some of this was an unwind of the short positions established as a spread trade against the metals. After plowing through the 600 level and setting an all time high in the index, the spread trades were reapplied across some company stocks pushing the index back down even in the face of rising metals prices.

If you note on the chart, the index moved back down to the same precise level at which the fierce wave of short covering commenced. It held firmly and moved back up off the level. While it is down, it appears that this level near and just below 570 is solid support in the sector. If that is the case, the shares should hold near current levels.

Let's see what the rest of the session brings us and what tomorrow does as well in regards to these miners.


  1. Hi Dan, with silver undergoing its parabolic move is it wise to buy at the current level since all past parabolic moves ended at the 8th day with a retreat in price. At present silver is approx 68% above its 200 day moving average. Maybe the history of past parabolic moves aren't applicable today since Asia/India are buying keeping the prices sustainable?

  2. A lovely piece of analysis on the HUI

    Have a read and enjoy.


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