FSU Editorial: "The HUI Died Yesterday" by Richard Gorton 12/05/2007

THE HUI DIED YESTERDAY
by Richard Gorton
December 5, 2007

The HUI indexed precious metal stocks, which have been one of the most fantastic means of garnering wealth since 2001 fell today, while physical gold moved higher.

This is not a bullish chart: the HUI relative to Gold have fallen of the edge of the edge of a massive head and shoulders pattern; this suggests a sell.

CDE, is a component of the HUI shares; it manifested bearish engulfing today; this does not bode well for the HUI.

The HUI indexed precious metal mining shares have been a tremendous vehicle for garnering and accumulating wealth: their days of doing so are over.

The final consideration here is that the HUI and the U.S. Treasuries decisively turn together at market pivot points.
$HUI:$USB manifested a bearish harami below support.

Here is the same chart weekly: this shows an extinguishment of gold stock wealth: one does not want to stay invested in gold stocks at this time; one wants to trade out for the real thing.

$HUI turned 1% lower today as
$GOLD turned 1% higher.

$USB was up, but only by 0.03% and manifested the bearish lollipop hanging man candlestick indicating a market turn.

I believe we have reached a market pivot point where futures-gold and futures-bonds are decisively turning lower, providing a strong sell signal.

Gold Stocks Have Disconnected From The Price Of Gold Physical gold, GLD, is up; while the precious metal mining stocks, GDX, is down -- trading lower with the rest of the stock markets.

Gold stocks are detaching from the price of gold.

Yahoo finance shows gold outperforming the gold stocks.

Investment application
Buying recommended
I recommend that one buy the ETF GLD which was up 1.43% today.

Specifically, I recommend that one transfer all of one's retirement wealth into the gold ETFs: GLD or IAU; and that one obtain margin credit to short sell as indicated below.

In as much as the U.S. Dollar, $USD, is falling, I recommend that one not have any dollar denominated assets -- ETFs, mutual funds, stocks or bonds of any type: I recommend that one transfer one's other financial wealth to BullionVault.com.

Short selling recommended
I recommend that one sell Coeur d'Alene Mines Corp, CDE, Market Vectors Gold Miners ETF, GDX, and all gold stocks, ETFs and mutual funds that one is invested in.

I recommend that one buy the 200% inverse of the precious metal mining shares
HORIZONS BETAPRO S UNITS CLASS, HGD.TO

Contact Information
Richard Gorton
Washington, USA
Email | The Resourceful Bear Blog