Roadrunner on HUI...he also mentions that people are possibly expecting a Dow collapse and frighted PM investments will get caught up in it. (Many analysts talk about gold and leave you to guess where that leaves the miners)

A cup is a cup....

THE HUI INDEX

We can see in the chart of the HUI, below, that price has run up from the late 2008 bottom to form a very large cup pattern. At this time the cup has been broken to the upside, and the cup top has been tested. We can see that the current formation is very similar to the price formation of the HUI back in the 2005/ 2006 period right before the HUI moved up sharply in price. To continue the fractal pattern from 2005/ 2006 all we need to see is for the HUI to make a big run upward. Such a run would fit our expectations for Gold and Silver to have a big run into mid-year- a move which would also match the late 70’s Gold and Silver Charts.

The height of the cup is measured from 150 up to 520. Therefore, a run to the upside would likely target around the 900 level based on the height of the large cup formation. I have previously laid out potential targets for the HUI off of the potential cup break-out up to a range of 937 to 970. I still believe those targets are possible by mid-year given my expectation for Gold and Silver to vault much higher in the same time-frame. Since we have already seen the first wave up off of the cup re-test, a move higher starting at any time could be an aggressive one as many negative-minded PM investors suddenly change direction. There is no horizontal resistance left above the late 2010 top on the chart to slow a sharp rise higher. If we get the big move upward, I’d expect it to come in two stages much like the break higher in 2006. A two stage advance would mimic the form of the analogous two stage rise seen at this point in the cycle in the late 70’s in the Gold Chart.