HUI October 10, 2017 - Metals Advance - Mining Shares Retreat - Can the Bulls "bear" THE FALL?

The HUI ended lower - 2.57 points (-1.25%) with a CLOSE at 202.03. On the daily chart, the fast stochastic posted a negative crossover but remains in overbought territory. The slow stochastic is rising and maintains its positive crossover. MACD is rising and has a positive crossover of a rising Signal line. Divergence is descending but remains above the zero mark.

GLD ended higher $0.32 (0.26%) with a CLOSE at 122.40. On the daily chart, the fast stochastic has a positive crossover, is rising fast, the K line is now in overbought territory. The slow stochastic is rising with positive crossover and fully out of oversold territory. MACD is rising and maintains a positive crossover of a rising Signal line. Divergence is rising and remains above the zero mark.

SLV ended higher $0.13 (0.81%) with a CLOSE at 16.15. On the daily chart, the fast stochastic has a positive crossover, is rising fast, the K line is now in overbought territory. The slow stochastic is rising with positive crossover and fully out of oversold territory. MACD is rising and maintains a positive crossover of a rising Signal line. Divergence is rising and remains above the zero mark.

The Bulls full of confidence and certain of victory advanced the HUI early on the march to 207.50 to the HIGH of the day at 205.35. Alas for the Bulls the Bears lay in wait and sprung a trap. The Bears drove the HUI down to the LOW of the day 201.53 (+0.37 points), a hit of the daily Bear target number of 201.16. The route almost complete, the Bulls managed a small rally at the end of the day to CLOSE at 202.03.

Today's action ended the counter trend rally that began on Friday. This does not mean that the HUI will fall tomorrow, but for purposes of monitoring THE FALL, any upside action will be Day 1. If the HUI is in THE FALL, all rallies will be counter trend rallies that will only last one to three days. The HUI posted an outside bar to the downside. I have repeatedly mentioned that outside bars need to be respected and traded.

For tomorrow, look for the Bulls to defend the 201.16 level. If they can take out today's HIGH then 207.50 is back on the table. Looking at the internals, I suspect that the Bulls have at least one more push in them, certainly the upside action in the metals is supportive. For the Bears, take out today's LOW. If the Bears take out today's LOW then it is very likely the HUI will start a waterfall downward. Today the HUI, SLV and GLD all posted a SELL signal.

I entered a small trade to the short side.

Caveat to the Bulls: resistance at 207.50 will be significant. This level is not only a Bear daily target level, it also is the 50% retracement level of the last move down. Thus far every test of THE FALL has confirmed the theory that the HUI will remain in a downtrend until the end of the year. The HUI will not regain a true "bull" mode until the September 7th HIGH at 220.22 is taken out or THE FALL has run its course.

SLV and GLD have had three days of rallying with huge gaps. These will probably get worked out to the downside at some point. The fast stochastics have skyrocketed which is not necessarily a good sign.

These are just my thoughts and observations, not advice etc. Please upvote and follow.

As for Wednesday, good luck and happy hunting.