$HUI (Gold Bugs Index) Chart Of The Day

I previously said one doesn’t need to chase the rally during the second leg, because any gains would not be sustainable and would subsequently be given back.

At the low yesterday, miners had already given back 62% of the second leg gains. Moreover, we are not done with the Intermediate Cycle Low yet. The final Intermediate Cycle Low isn’t due until late June or early July. This is why it wasn’t critical to chase the second leg, because one was going to get a second shot at it anyway.

Unfortunately, I suspect too many traders listened to the pie in the sky nonsense that passes as analysis…and bought at the top and are now suffering a 10% draw down that they didn’t need to suffer…and it’s going to get worse before the Intermediate Cycle Low is finished.

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