Analysis of the
cycles of the HUI index since 2001
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This is just an observation of the regular cycles of the HUI index (AMEX Gold Bugs Index). By imagining that the HUI index keeps the same rhythm of decline and increase in the next months, here are the objectives.

I. Objectives of increase.
Value absolved from the increases.
- First triangle of the HUI index, the increase leaves 35 and ends in 80
points, what makes 45 points of increase.
- The second triangle of the HUI index, the increase leaves 80 and ends
in 155 points, what makes 75 points of increase.
- The third triangle of the HUI index, the increase leaves 155 and ends
in 260 points, what makes 105 points of increase.
By accepting that the vague following one have the same progress, it gives
an objective of 395 points.

II. Objective time
of the HUI index.
A) The time of the cycles of the
HUI index.
- The first wave in the 1st triangle measures 8 months +/-.
The second wave in the 2nd triangle measures 12 months +/-.
- The progress between both waves is of + 50 %, if the same progress is
kept for the next wave it gives the third wave of 18 months. That is the
exit of the third triangle would be made in June, 2005.
B) The phases of increase of the
HUI index.
The first phase of increase lasted 3 months and the second 5 months, if
it continues with the same rhythm the third phase of increase should last
8 months.
This means that the high point will be reached in February, 2006 430 points
(it is just an order of height).
III. Good period to buy goldmines
or silver.
A) The sector around 195 points.
The current zone of the HUI index presents a good moment to buy companies
of gold and silver. The increase will begin only in June, 2005; we
are at present in a low point where, if the scenario is exact, it is
interesting to buy.
It is possible to see on this graph that this right-hand side was a good
signal of purchase repeatedly.

B) Invalidation.
If the HUI index passes too much below this zone, it is a very negative
sign.
Be careful!!! I built this analysis on the idea which the HUI index continues
with the same cycles, nevertheless nothing says that it will make it,
and that it will be also precise.
The current zone is an interesting zone to buy just over the oblique support
which has already shown its efficiency in past. Then, if the HUI index exceeds
the zone 260, it is a very important bullish signal.
Dr Thomas Chaize
