Elliott Wave 5.0 "Reboot"

Saturday, February 27, 2016

HUI Bull Market Review

The HUI has pressed higher, but gold did not break to new highs. There is a potential for the HUI and gold stocks to be in the process of finishing an expanded flat top and we may go into a decline in the next few weeks.  Expanded flats happen all the time, but many times we are not looking for them or just plain lazy wave counting will also ignore them. Many times we just lump them with an impulse wave, but this should never happen. 

Be it a 4th wave bottom or part of a bigger zigzag bottom will not be clear enough,  until the pattern breaks to newer highs.  Either way we have had a stunning rally that has gone very fast with only very small corrections. This is not natural and eventually will succumb to an even bigger decline, if not a downright resumption of the bear market.  After all, who really knows if this is a "C" wave bull market, from an inverted expanded flat?  "C" wave bull markets can act just like this, so anything can happen. 

The idea is to milk this run as long as we can regardless what kind of a bull market it is, as all the contrarians are smiling with a big grin! Of course, when their smile is the biggest, chances are good that the gold stocks will wipe the grins off their faces very quickly. Investing or trading is an emotional thing as the markets will always end up disappointing the majority. 

Short term I may be bearish, but I think another leg up will happen.