I know alot of you folks are becoming frustrated with our latest rally phase in the HUI. We have been in a bullish rising wedge consolidation pattern for over 4 months now frustrating the heck out of people. This is what consolidations are designed to do. The battle between the bulls and the bears goes on longer sometimes than what we think should be normal. This is just the market sorting things out in its quest to frustrate as many investors as possible before it resumes its original move.
Back on Jan. 15th I wrote a post called “Wave 3 of III complete look”. In that post I was trying to explain a conundrum I was having with the magnitude of our wave 3 of III. I went into detail explaining a price objective for our smaller wave iii of 3 and laid out some ground work for a final top for the bigger wave 3 of III. It is now 2 months later and nothing has changed my thinking in that regard. The only thing I am off on at this point in time is the timing aspect of our smaller wave iii of 3 top. It looks like it will come in a bit later than I had originally thought, not a big deal in the bigger wave 3 of III up trend channel.
What I want on focus on is not so much the mechanics of our price objectives but on the uptrend channel itself. Here is what I wrote back in Jan. of this year trying to explain the conundrum I was having with our price objective for wave 3 of III. If you don’t get anything out of the post please just look at the 1st chart and the very last chart, as it shows the uptrend channel as I perceived it at the time. No one can call every little twist and turn the markets make but we can, to some degree, put parameters in place, tendlines if you will, to show containment of the price movements.
goldtent.com/wp_gold/2008/01/15/huiwave-3-of-iii-complete-look/
Our current Wave 3 of III uptrend channel clear and uncluttered.
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As you can see, our wave 3 of III uptrend channel is still firmly in place. We have tested the bottom rail several times with success, and if this last test made the other day holds we should be getting ready for vertical move up to the top rail over the next 6 weeks or so. We have been walking up the bottom rail as they say which portends a good move up when we begin to lift off the bottom rail in earnest. Exactly which day that will be I can not say for sure but as long as we keep marching up that bottom rail it will eventually happen. Gold did the exact same thing just before it’s latest move up.
Up to this point, our wave 3 of III uptrend channel is pretty typical in its construction as compared to all the other uplegs in this bull market for the HUI. Nothing is out of the ordinary with our current wave 3 of III and when we breakout of the 4 month old bullish rising edge formation, the next leg up will begin that should take us up to the projections laid out in the post above, 660 to 676.
I will stop for now as there is much more I could say about our present situation and how positive it looks to me at this very moment. I will say one more thing and that is, I believe, as I stated in the post above, that we should rally up until August of this year before we make some kind of important top.
All the best…Rambus
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PS: Thanks again FGC for keeping Analysis Paradise updated for easy reference. Having that historical data at our finger tips, to go back in and checkout how we might have been thinking months ago, is the only way to see if we are totally on track or out in left field somewhere.
Thanks again Fullgoldcrown…Rambus