HUI and the XAU Fill Downside Gaps From 12-7 And Gold's Positive Correlation With The US Dollar
12-7's downside gaps at 255.82 for HUI and at 119.69 for the XAU were filled today. NEM's downside gap at 48.75 from 12-7 will probably get filled tomorrow, but, either way, a very sharp rebound, which will probably be the monthly downcycle's Elliot Wave B short term upcycle that will culminate with a short term cycle high such that the monthly downcycle's declining peaks downtrend line is relatively flat. Then the final Elliot Wave C plunge should occur which will be the steep/parabolic part of the monthly downcycle. So, I'll probably be looking to day trade long tomorrow once the Elliot Wave B short term upcycle begins.
Gold got whacked today yet the US Dollar fell a significant -0.57. The US Dollar and gold have risen in tandem most of this year with the USD hitting a major cycle low in late 2004 and gold doing so in early February. So, they've obviously enjoyed a significant positive correlation most of this year which is different than the negative correlation that existed last year.
The NEM Lead Indicator was bullish again today at +0.36%, was +0.38% yesterday vs the XAU and +1.46% on Monday (Tuesday and Monday's numbers were reversed earlier) on top of +1.06% last week, which, combined with HUI and the XAU's very sharp volatility spikes that began Monday and ended early Tuesday with another sharp one occurring today, points to a sharp rebound and possibly even a test of Monday's likely monthly cycle highs in the near future. The test seems unlikely right now due to the likelihood of SPX dragging NEM down in the next few days.
So, Monday's cycle highs were probably monthly cycle highs but it's a mute point for monthly cycle traders whether a higher cycle high occurs because the monthly cycle sell signal that occurred last Friday 12-9 indicates that it's too risky to trade aggressively long, so, day trading long or maybe holding a modest position overnight is OK, but being 100% long is far too risky. Ciao
Gold got whacked today yet the US Dollar fell a significant -0.57. The US Dollar and gold have risen in tandem most of this year with the USD hitting a major cycle low in late 2004 and gold doing so in early February. So, they've obviously enjoyed a significant positive correlation most of this year which is different than the negative correlation that existed last year.
The NEM Lead Indicator was bullish again today at +0.36%, was +0.38% yesterday vs the XAU and +1.46% on Monday (Tuesday and Monday's numbers were reversed earlier) on top of +1.06% last week, which, combined with HUI and the XAU's very sharp volatility spikes that began Monday and ended early Tuesday with another sharp one occurring today, points to a sharp rebound and possibly even a test of Monday's likely monthly cycle highs in the near future. The test seems unlikely right now due to the likelihood of SPX dragging NEM down in the next few days.
So, Monday's cycle highs were probably monthly cycle highs but it's a mute point for monthly cycle traders whether a higher cycle high occurs because the monthly cycle sell signal that occurred last Friday 12-9 indicates that it's too risky to trade aggressively long, so, day trading long or maybe holding a modest position overnight is OK, but being 100% long is far too risky. Ciao
posted by Joe Ferrazzano at
1:10 PM
1 Comments:
Alice,
Elliot Wave is a new tool as of this year because it's highly useful because it provides the likely cycle structure.
The current downtrend lines since Monday's likely monthly cycle highs are way too steep to be the monthly downcycle trendline, which almost always begins relatively flat. This indicates that the downtrend line since Monday is an EW Wave A short term downcycle.
The nature of cycles indicates that the current downtrend is a short term downcycle not the monthly downcycle, even if Elliot Wave didn't exist. Monthly downcycles have been reliably doing EW A, B, C corrections, but Elliot Wave is secondary to the nature of cycles, and, isn't really needed but is highly useful. Ciao.
By
Joe Ferrazzano, at 11:29 PM
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