I have included all the action from the panic bottom in August of last year to the present. To be sure there is some technical damage begin done but all is not lost yet. The bottom rail goes all the way back to the August low and has held support up to this point. The top rail has held any breakout in check so the wedge continues to converge. I thought last week when we broke up above the expanding triangle, the last little pattern within the wedge, that the breakout we were looking for was at hand but Mr. market never makes it easy for you. It looks like the 450 area is key support for the HUI.
Notice the MACD at bottom of the chart. We are almost as low as the August panic bottom where the world as we knew it was coming to an end at that time. Also the RSI is not quite as oversold as the August low reading but we are sitting at the lowest point since that bottom.
This feels like a shake out of the weak shares where the smart money picks them up at a low price only to rally them up and distributes them to the same folks who sold them down here. Rinse and repeat.
All the best…Rambus
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