Things are starting to break down again in the stock market. Does this surprise us? Not at all! Gold, in the meantime, is getting a bid again, while gold miners are still going ballistic. No surprises here, either.

So here we are, a few weeks after every analyst advised to ‘wait for a pullback’ in gold mining equities. And more specifically, ‘don’t chase these things’.

What did we advise you to do? To just go ahead and buy some of these gold mining stocks, as this, dear reader, is the start… or should we say ‘re-start’ … of the secular uptrend.

Gold bugs index: the next leg-up

And when a new trend starts within a secular wave, there is not much to stop it. Just have a look at the chart of the HUI gold bugs index.

Do you see any significant pullbacks?

We don’t!

All we see is some minor backing-and-filling, to set-up for the next leg-up… which is exactly where we are NOW.

That’s the problem with gold stocks. You don’t get a lot of good opportunities to buy.

And now, this thing is heating up to go much, much higher. How high? Well, lets have a look.

Here’s a Fibonacci retracement from the ’11 highs.

Next stop is the 38.2% retracement level at 305 for the HUI gold bugs index.

So lets take a step back. We already doubled from the bottom. And from here on, we again see a potential of 50% gains from here, short term…

And there is still more room on the upside, to the 61.8% Fibo, which is at 430 for the HUI.

That’s a fourfold move from where we were around New Year!

You see the problem? No easy entries.

Will this thing go up in a straight line. No, of course not, but we don’t see large setbacks, either. Just some more backing-and-filling, all the way up!

Investors in gold and silver mining equities should steer clear, and let the secular trend do its work. Just sit back, and watch the show.