HUI: Wolfe Wave - Rising Channel - Inv. H&S

(Click On Charts To Enlarge)

Some interesting patterns in the HUI over the past year:

Chart #1: Bearish Wolfe Wave - Nice Symmetry between Waves 1-3 (46 days) and Waves 3-5 (42 days). Notice that between Waves 3 and 4, a Symmetrical Triangle formed (pattern in purple). The chart was bullish, and the Symmetrical Triangle was a bullish continuation pattern that broke out and took the HUI to its final high, the Wave 5 "Fakeout Breakout" high. The Bearish Engulfing pattern at Wave 5 was a low risk:reward entry short (at HUI 505) The break of the bottom of the pattern (Wave 2-4 trendline) is another short entry (at HUI 450). The target line (Wave #6) was reached on April 29, just below HUI 400.

Chart #2: Two days after the Bearish Wolfe Wave target line was reached, the HUI put in a bottom (Purple #1), then rallied in a Rising Channel. Similar to the Bearish Wolfe Wave, the Rising Channel had an intraday "fakeout breakout" on a Dark Cloud cover candle. That was a low risk:reward entry short. Another short was the break of the bottom of the pattern, or the failed retest of the bottom of the pattern over the next few sessions.

Chart #3: In August-September, the HUI formed a possible Bullish Inverse H&S. 309 was the low of the Left Shoulder, which "shouldn't" get taken out. A Right Shoulder low should be higher than the Left Shoulder, indicating less interest in selling. A takeout of 309 is a clue that the pattern probably won't work out. A takeout of the low of the Head is confirmation of that.

Chart #4: 309 got taken out and the low of the Head got taken out, as well. Rather than take the height of the pattern and add that to an upside breakout, we SUBTRACT the height of pattern from the low of the Head (358-253.73 = 104.27 points of downside, subtracted from the 253.73 low of the Head = Target: 149.46 IN PLAY. The October 24 low was within a point of the target. Note that after the low of the Head was taken out, the HUI rallied back toward the Left Shoulder low of 309, and toward the bottom of the Kumo (Cloud). The rally failed at HUI 299, ju-ust below the Kumo. Ichimoku Kinko Hyo is "At a glance...the table of balance," and we can see "at a glance" the overhead resistance, represented by the Kumo (Cloud), which is the vertical red lines.

Currently, the HUI is trying to bottom again. It's sitting at 247, just below the bottom of the failed Inverse H&S, beginning at the 253.73 low of the Head. The top of the Kumo (Cloud), which is represented by the vertical red lines, currently is at 255.03, so 253.73-255.03 is nearby resistance. At the 150.27 low on October 24, the HUI had been whacked for a 71% loss off the St. Paddy's day high of 519.68, so we'll see if the HUI can turn it around and start moving higher.