This Key Stock Sector Completed a Bottom Formation Last Week – Mike Swanson (10/18/2018)

Whenever the stock market takes a dip it gives us information on what is likely to become the next leading sector of the stock market, because what tends to hold up the best during a drop shows that buyers are getting in.

Oilprice.com has one this week that you can read about here:

http://oilprice.mobi/mQZq

What held up the best last week (it actually went up) is gold and mining stocks.

Here is the HUI gold stocks index:

The HUI dipped in August and then spent weeks putting on a reverse head and shoulders technical part pattern.

That pattern had a resistance level or $150.00.

Last week when the DOW fell 800 points in a day the HUI closed above $150.00.

Gold itself had fallen to $1,180 after the September Fed meeting and then rallied above $1,200 to go above $1,220 last week.

Both the HUI and gold appear to be pausing to digest this move.  Such a successful consolidation would trigger another rally.  On a short-term basis the next resistance point on gold would be the area of its 200-day moving average of $1,280.

However, there is more to mining stocks than just and gold and silver.

You have uranium stocks that also interest people and stocks of rare elements.  Those tend to be small cap plays that go down faster when the sector falls like it did in August due to their small trading floats, but rise much more when it goes up as a well.



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