We are on the same page as I’m viewing this rally as an oversold bounce back up to overhead resistance. Below are 2 views of what the overhead resistance may look like. First, the bearish, 5 point rising wedge that we broke out of 4 weeks ago beckons for a backtest to 365. Also the neckline of the H&S top pattern that nobody wants to recognize, which is unbelievable to me, comes in at 400.
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The next chart is of a possible uptrend channel for the HUI that you won’t find anywhere else except here in the tent. Notice the center dashed blue rail that divides the major uptrend channel into two equal channels. For the better part of the bull market we have traded in the upper channel until 4 weeks ago when we broke through the center rail. A backtest of the center dashed blue rail would also come in at 365. A trip down to the bottom rail around the 240 area would still leave a very nice bull market uptrend channel intact and would be healthy in the long term respect IMHO.
All the best…Rambus
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