HUI and Bary Hits Buffett

For what it is worth, the HUI broke down thereby completing (not decisively) a head and shoulders reversal pattern. This doesn't change the long term picture which is bullish. Precious metals stocks seem to be following stocks again, and stocks have been suffering a correction at best. This in the face of the crowd expecting a year-end rally in stocks. If a bull market tests one's resolve, that resolve is being tested for gold bugs. It is important to keep in mind that if a bad day or week or two wrecks your outlook, then you want to reexamine your position sizes.

The longer term chart below depicts the long term view. This correction is but a blip in a long term bull. The long term chart does point to an important support/resistance area. I'm looking for the HUI to break below the 365 level, whereupon the crowd will pronounce the gold bull market dead, and then they will be promptly whipsawed.

Barron's did a piece on how overpriced Berkshire Hathaway is and it knocked the stock down by almost 5%. Interesting to note that B shares traded twice the dollar volume as A shares, perhaps speaking to the strength of the holders of each. If not for short positions in FDX, TSCO, EYE, LIZ, and COF the drawdown in the gold and gold stocks, and longs would hurt.