More on RSI

Andy Hoffman

Simply amazing that the RSI on the HUI has fallen all the way from 65 to 33 in JUST ONE WEEK!

Incredibly rare to see that kind of drop so fast in ANYTHING, let alone an index of large cap stocks amidst a bull market (when nothing particularly negative has happened to their outlook).

The last time the HUI’s RSI fell as low as 33 was last October, precisely when the HUI bottomed at 150 (compared to 384 today)!

Not only that, the HUI has barely fallen below its 50 DMA, and is comfortably 40 points above its 200 DMA.

And here are some other charts:

Silver’s RSI fell from 69 to 38 in a week, pretty amazing considering it is a metal, not a stock, and that none of the other metals fell more than 4% during this period.

Heck, gold has fallen only a couple of percent and its RSI plummeted in just one week from 72 to 46!

How about some of the big cap PMs?

My largest holding, SLW, has seen its RSI incredibly drop from 72 to 36 this week, and yet it too is barely below its 50 DMA, let alone its 200 DMA which is more than $3 lower! The last time it had an RSI this low, the stock was at $7 compared to $12 today. And the time before that, the stock was at $2!

How about GG? 66 to an astounding 30 in the past week, a level only seen a handful of times in the past three years, the last time being last fall when the stock hit $13 compared to $36 today.

We’ll see if these charts prove my theory that the worst is already over for this decline, but it sure looks like it, particularly with Sinclair’s countdown coming to a head in the next week or two (11/09, to be exact).

ANDY HOFFMAN