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

In a bull market, it’s more dangerous to be out-of-market, rather than be in the market. The current correction in HUI looks like to be almost over, coincident to the rise of $USD.

Despite the fear in rally in $US to derail HUI, and/or a serious stock market correction due to mortgage problems, the chart of HUI looks eerily similar to the correction back in 2005.

According to the ChartWorks from Bob Hoye at InstitutionalAdvisors.com, the best time to buy gold is when $US just crosses above the 20-days EMA level, estimated to be from Dec 28th to Jan 18th. To collaborate with the above timing window, I played with my MACD calculator by projecting future prices of HUI in the following four scenarios: flat, downward, slightly upward, and down and then up. The last valid data point is on Friday of Dec 7th, closing at 412.06. The projected chart stops when MACD makes a bullish cross-over.

1. Flat (stay at 400 for 13 days):

2. Downward (-3 points for 14 days to 371, and then stay at 375 for 6 days):

3. Slightly upward (+2 points for 5 days from 408, 410, 412, 414, 416):

4. down and then up (-2 points for 12 days down to 400, and then +2 points for 4 days):

From all of the above scenarios, the MACD indicator is certainly going to have a bullish crossover from Dec 14 to Jan 4 (in 5 sessions to 20 sessions in the worst case). The previous significant buy signal from MACD triggered at around the bottom of HUI near August 16. With all the fundamentals working in favor of a continuing gold bull market, I expect that the time to over-weight gold market is very close. I hope to see spot gold to correct back to 720 to 745 area before I jump back into HUI (via GDX). But again, don’t you want to miss the train!

Just a note, depending on the price action, the actual bullish MACD may be later than earlier. Essentially, lower prices will delay this signal.