Last week everyone was looking at the potential H&S bottom forming on all the PM index’s but the markets work in a perverted way sometimes. What everyone thinks is reality turns out to be the complete opposite of what they are thinking. When the HUI broke below the right shoulder bottom, around the 310 area that needed to hold for the H&S bottom formation to be valid, it signaled look out below. What we got, and it shows up beautifully on the 60 minute look, was a H&S top formation. Remember that 50 point drop last week in one day, that was the breakout of the H&S top. What I find so incredible is that we are now forming another H&S pattern as part of the original H&S top only this one is now close to 100 points in a measured move down to the 165 area. For those that can measure the 1st little H&S top you will see it measured right down to our bottom we hit last Friday before we got that 20+ up move and then saw it evaporate before the end of the day setting up our current H&S pattern. Folks, I’m not trying to scare anyone out of their shares, all I’m trying to do is to inform you of the possibilities that may lie ahead of us. The charts have spoken loud and clear since the big H&S top patten that reversed the 8 year bull market in PM shares. That was a reversal pattern not a consolidation pattern. They are two completely different animals with two completely different objectives.
All the best…Rambus
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Remember the bearish rising wedge pattern I’ve been showing that has gotten several LOL’s from a guru in the know. The 165 area comes into play along with our current H&S top formation.
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