My 1st Million At 33 – yes, you can do it too

On Dec. 4, I highlighted the fact that the HUI broke above the down trend line that characterized the correction that started in May. It retreated below this important trend line last week (chart 1). Normally this would be a cause for alarm, although one has to realize this is de reguire for the HUI emerging from a long correction as the second and third charts below demonstrate.

The relevant question is again whether we have entered wave 3 of III. Martin Goldberg at Financial Sense continues to do a great job laying out the overall picture. From a pattern recognition point of view, the bearish argument harkens back to chart 3 where the correction that stared in late May 2002 found an intermediate bottom in October but didn’t entirely finish till March 2003. However, I’m optimistic based on the significant amount of time we have already spent under the 200 dma and the catharsis it normally engenders. I remain hopeful that the impending “golden cross”, where the 50 dma overtakes the 200 dma, will provide the necessary fuel for the next leg up.

So it goes without saying that the trend line and moving averages in chart 1 bears close watching. The good news is that we don’t have long to wait for a resolution.