Over the past
20-years, some “solid trends” have taken place, when one compares
the
Gold Bugs Index
(HUI) to the S&P 500. Below compares the Gold Bugs
Index to the S&P 500 over the past 20-years.
sbaxman, As a loooong term swing trader, I really appreciate
many of the charts that you post.
This is a similar snapshot, $XAU:$SPX. Although the miners have
enjoyed a great run this year and are now getting overbought, I
really like the long term look for swing traders.
Thanks, 3putt. I, too, am a long term swing trader and have
gotten burned by waiting for a "good" correction in the miners. I
have a small position, but it looks like the long term outlook is
very good. In a bull market, you can miss a lot of opportunities by
waiting for the perfect set up! Thanks!
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HUI INDEX
Posted by sbaxman111 on 6th of Jul 2016 at 09:46 am
Gold Bugs index does something it hasn’t in 5-years!
Over the past 20-years, some “solid trends” have taken place, when one compares the Gold Bugs Index (HUI) to the S&P 500. Below compares the Gold Bugs Index to the S&P 500 over the past 20-years.
From the mid 1990’s until 2001, the ratio above fell, reflecting that the Gold Bugs Index was “weaker” than the S&P 500. At the time the trade was to be long the S&P and short Gold Bugs. A breakout of a 5-year downtrend took place at (1) and the Gold Bugs Index (Mining Stocks) was stronger than the S&P 500 for the following decade!
Over the past 5-years, the ratio has been falling, reflecting to be short mining stocks and long the S&P 500.
The ratio is now breaking out of its 5-year downtrend at (2) above, reflecting that the Gold Bugs Index is much stronger than the S&P 500 of late.
A breakout at (1) suggested to be long miners/short S&P 500 for years (nearly a decade). A breakout at (2), favors the trade to be long miners and short the S&P 500. Will it be different this time?
sbaxman, As a loooong term
Posted by 3putt on 6th of Jul 2016 at 05:07 pm
sbaxman, As a loooong term swing trader, I really appreciate many of the charts that you post.
This is a similar snapshot, $XAU:$SPX. Although the miners have enjoyed a great run this year and are now getting overbought, I really like the long term look for swing traders.
Very Helpful Post
Posted by mdgfain on 6th of Jul 2016 at 05:18 pm
Thanks, 3putt. I, too, am a long term swing trader and have gotten burned by waiting for a "good" correction in the miners. I have a small position, but it looks like the long term outlook is very good. In a bull market, you can miss a lot of opportunities by waiting for the perfect set up! Thanks!