HUI Update...

By: Rambus Chartology | Wed, May 25, 2016
Print Email

Below is the two hour chart for the HUI which shows the horizontal S&R zone around the 210 area which is being strongly tested this morning. If you look real close you can see a gap below the S&R zone this morning which I didn't want to see. This is the first time since the bull market began in mid January that the price action is close to trading below a previous low. The next area of critical support is the 182 to the 187 area.

HUI 2-Hour Chart
Larger Image

This next chart is a daily look at the HUI which shows two completed consolidation patterns with the third one testing the critical bottom rail of the flag formation. Today's price action is trading below the 20 day ema with the 50 day simple moving average coming in at the 200 area. I've also added the fib retracements which shows the 38% retrace at 183 or so which is the second area of support on the 2 hour chart above.

HUI Daily Chart
Larger Image

So far, since this bull market began in mid January of this year, we have yet to see a real consolidation pattern develop of importance form.. This daily chart below shows you where I would expect a consolidation pattern to form based on the current information we have. In the bigger picture this would be a healthy development and not hurt the bull market in anyway.

In bigger consolidation patterns you will normally see some type of reversal pattern form at the reversal points. Sometimes they are hard to spot in real time but in hindsight they will usually show up pretty clearly. On the daily chart below I've added the possible new trading range or consolidation area with what now looks like a small double top with a breakout and backtest completed. The double top measures out to the 190 area which would be an area to look for the second reversal point to show up. Based on the lower brown shaded S&R zone, on the two hour chart above, and the fib 38% retrace down to the 183 area, should offer some solid support. For the time being I'm going to call the top in the possible new trading range or consolidation area at 235 and the bottom at 180 or so. What type of consolidation pattern that may build out is still not known yet as the HUI has just started to consolidate the first impulse move up. The consolidation pattern could be a triangle, rectangle, flag or wedge.

Bigger trading ranges like this can be traded if one doesn't get too greedy. We should see some type of reversal pattern develop at the lower boundaries of the trading range between 180 and 190 or so.

HUI Daily Chart 2
Larger Image

Below is the daily line chart we've been following which shows the current S&R line being strongly tested today at the 205 area. If this area gives way then the lower S&R line at the 182 area comes into play which is also the 38% fib retrace of the bull market.

HUI Daily Chart 3
Larger Image

The weekly chart below shows the three year S&R line going back to April of 2013 which comes into play at the 205 area.

For the time being I'm going to hang on and see what happens if this possible first consolidation pattern begins to build out between 180 and 235. It will be somewhat painful but that is the nature of a consolidation pattern, to inflict as much pain as possible before the next impulse leg up can begin. Some of you who have some decent profits may want to take a few chips off the table and see if you can reenter at a lower price. Normally though it seems like one always pays a higher price up to get back in again.

If this is really the beginning of a bigger consolidation pattern the volatility will be very strong in both directions until the pattern is complete. Also keep in mind in a trading range we'll have to see a minimum of four reversal points so even if we see a reversal down at the 180 area we'll have to see another rally followed by one more decline to complete the minimum requirements of a consolidation or continuation pattern.

HUI Weekly Chart
Larger Image

 


 

Rambus Chartology

Author: Rambus Chartology

Rambus
Rambus Chartology

Rambus Chartology is Primarily a Goldbug TA Site where you can watch Rambus follow the markets on a daily basis and learn a great deal of Hands on Chartology from Rambus Tutorials and Question and Answers.

Most Members are Staunch Goldbugs who have seen Rambus in action from the 2007 to 2008 period at www.goldtent.org and now Here at Rambus Chartology since early 2012.

To review his Work and incredible calls from the 2007-2008 period click on the top right sidebar in the "Wizard of Rambus” ..."What If !!" Post

To Follow Rambus Unique Unbiased Chart Work and participate in a Chartology Form with questions and answeres and learn the Art and Science and Mindset of a Pro Trader please Join us by subscribing monthly at www.rambus1.com

You will find Rambus to be a calm humble down home country tutor with an incredible repitoir of all the TA based protocols tempered with his own one of a kind style...simply put...He wants to keep his subscribers on the right side of these crazy volatile and downright dangerous markets

Disclaimer

IMPORTANT RISK DISCLOSURE This site has been prepared solely for information purposes, and is not an offer to buy or sell or a solicitation of an offer to buy or sell any security or instrument or to participate in any particular trading strategy. The information presented in this site is for general information purposes only. Although every attempt has been made to assure accuracy, we assume no responsibility for errors or omissions. Examples are provided for illustrative purposes only and should not be construed as investment advice or strategy. The information presented herein has not been designed to meet the rigorous standards set by the Commodity Futures Trading Commission for disclosure statements concerning the risks involved in trading futures or options on futures. That disclosure statement must be provided to you by your broker. The materials in this site do not attempt to describe the risks to investors that may be associated with the way trading is conducted in any particular options market or in any market for an underlying or related interest. In the preparation of this site, every effort has been made to offer the most current, correct and clearly expressed information possible. Nonetheless, inadvertent errors can occur and applicable laws, rules, and regulations often change. Further, the information contained herein is intended to afford general guidelines on matters of interest, and to serve solely as an introduction to our financial services. Accordingly, the information in this site is not intended to serve as legal, accounting, or tax advice. Users are encouraged to consult with professional advisors for advice concerning specific matters before making any decision impacting on these matters. This site disclaims any responsibility for losses incurred for market positions taken by members or clients in their individual cases, or for any misunderstanding on the part of any users of this website. This site shall not be liable for any indirect incidental, special or consequential damages, and in no event will this site be held liable for any of the products or services offered through this website. By accessing or otherwise using this website, you are deemed to have read, understood and accepted this disclaimer.

Copyright © 2012-2017 Rambus

All Images, XHTML Renderings, and Source Code Copyright © Safehaven.com