Currently the HUI is oversold in monthly chart and the HUI-GOLD Ratio at 0.25 is at Extreme Panic Levels. My theory is that we are in P2 of SC 3 and that is based on that majority of capital has not even seen Mining Stocks nor Precious Metals. The money flow measured in Billions of Dollars was tiny compared to Equity Market inflows. Apple alone is worth more then the whole HUI Index showing how tiny this index actually is.
A Bull Market is over when most retail investors and mutual funds are all over Mining Stocks and we have not seen remotely such event. Hence, my assumption that we are only experiencing P2 and the next move up will be P3 of SC3 bringing us way beyond the last high.
A closer look at the Weekly Chart shows RSI oversold and other indicators as well. Combined with a monthly long term retracement of 391 area give us a great opportunity to add position to the ones initiated in past week.
Obviously for most investors it is very difficult to buy into oversold levels as nobody is ready to buy fear. Well, when we look back to September 2011 nobody was ready to buy into fear as well and now the indices are far higher.