Gold stocks have made a great run, but this run has several big open gaps below, and gaps on an index is something I would not want to ignore. I think a correction is due as no market can speed along at this pace without at least a correction.
If this rally is actually a wave 1 then, we still should see an obvious correction if not a down right return to the bear market. This great run from an all time low could be the tail end of a "C" wave bull market, then if that's the case then the HUI is a sell.
The same thing applies to the GDX as it also has gaps below and now has added the spike as well.
At best we should get a correction, but if an impulse correction does not form, then gold stocks could make a death spiral to a new record low. I would be far more bullish if I though the US dollar was ready for a major decline, but I don't see this as being the case at this time. It is next to impossible or it's very rare that any asset class can keep going in a vertical move without a correction.
Still, what has to happen if this is a much bigger bull than what we may think? The market has to impulse going up and any deviation will confirm a bearish rally. It would just be a bigger bearish rally.
Price is irrelevant in telling us anything as pattern recognition is far more useful.