The Indicators Portend Strength and Welcome to the Elliot Wave 4 Short Term Downcycle
HUI has fallen about -2.50% from it's cycle high yesterday ( http://finance.yahoo.com/q/ta?s=%5EHUI&t=5d&l=off&z=l&q=b&p=&a=m26-12-9,p12,fs,w14&c= ) so far and all three indicators portend strength today, but the Elliot Wave 4 short term downcycle is the most important consideration today. The NEM Lead Indicator was very bullish at +1.63% vs the XAU yesterday and is bullish again today at about +0.50%. This alone probably means that an Elliot Wave 4 short term cycle low will probably occur today for HUI, NEM, and the XAU, but I need to do more analysis. Keep in mind that the downside gaps from 11-23 and the downside gaps from 11-21 at 245.01 for HUI and at 115.10 for the XAU (NEM's at 46.33 was filled) may get filled in this Elliot Wave 4 short term downcycle. So, short term cycle lows may not occur today.
You can also draw the short term downcycle's parabolic trendline and wait for a 1% follow through short term cycle buy signal (2% required for monthly cycles), but waiting for a trendline buy signal is much less effective for short term cycles than monthly cycles because you can miss much of or even an entire cycle if you wait for a buy signal because of the usually short timeframe involved. Even in the prior monster EW 3 short term upcycle much of the move occurred in one day when the XAU rose nearly 6%, if you weren't in you missed a big part of the move.
XAU Implied Volatility rose sharply to 29.945 yesterday from 29.13 on 11-25 vs a -0.32% decline in the XAU yesterday which is a significant rise in fear that portends strength/an uptrend for some of today's session, but the Elliot Wave 4 short term downcycle is the most important consideration today. It appears that monthly upcycle Elliot Wave 3 short term cycle highs finally occurred yesterday. It was such a strong/unusually long short term upcycle that it made a few higher highs in rollover mode. Short term upcycles usually only last 2 to 4 days, but the most recent one lasted well over a week (7-8 sessions). The XAU Put/Call Ratio rose to 0.67391 today from 0.66179 yesterday which is a significant rise in fear that portends strength/an uptrend for some of today's session. Ciao
You can also draw the short term downcycle's parabolic trendline and wait for a 1% follow through short term cycle buy signal (2% required for monthly cycles), but waiting for a trendline buy signal is much less effective for short term cycles than monthly cycles because you can miss much of or even an entire cycle if you wait for a buy signal because of the usually short timeframe involved. Even in the prior monster EW 3 short term upcycle much of the move occurred in one day when the XAU rose nearly 6%, if you weren't in you missed a big part of the move.
XAU Implied Volatility rose sharply to 29.945 yesterday from 29.13 on 11-25 vs a -0.32% decline in the XAU yesterday which is a significant rise in fear that portends strength/an uptrend for some of today's session, but the Elliot Wave 4 short term downcycle is the most important consideration today. It appears that monthly upcycle Elliot Wave 3 short term cycle highs finally occurred yesterday. It was such a strong/unusually long short term upcycle that it made a few higher highs in rollover mode. Short term upcycles usually only last 2 to 4 days, but the most recent one lasted well over a week (7-8 sessions). The XAU Put/Call Ratio rose to 0.67391 today from 0.66179 yesterday which is a significant rise in fear that portends strength/an uptrend for some of today's session. Ciao
posted by Joe Ferrazzano at
6:58 AM
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