................The NEM And SPX (S & P 500) Lead Indicators!
In late September when HUI, NEM, and the XAU put in monthly cycle highs on 9-30 after they hit monthly cycle sell signals, therefore were rolling over/flattening out, SPX (S & P 500) was in Elliot Wave B up of an Elliot Wave A, B, C monthly downcycle, which is probably what caused HUI, NEM, and the XAU to headfake up nearly two weeks after it appeared that they had hit monthly cycle highs in the previous monthly cycle, because SPX index funds were buying NEM.
http://finance.yahoo.com/q/ta?t=3m&s=%5EXAU&l=off&z=l&q=b&a=m26-12-9&a=p12&a=fs&a=w14&c=nem%2C+%5Ehui&c=%5EGSPC
In the chart at the link above note that SPX's late September rally coincided with HUI, NEM, and the XAU's, then SPX turned down and so did HUI, NEM, and the XAU. SPX hit a monthly cycle low in early October, about a week before HUI and the XAU (NEM bottomed on 11-4 due to the PDG bid by Barrick), and much of their monthly upcycles coincided. SPX's monthly upcycle is rolling over now as is HUI, NEM, and the XAU's which may have peaked on Monday. The point is that SPX index funds, because they are a huge factor due to buying and selling NEM (NEM is in SPX ), probably make SPX a good lead indicator for gold/silver stocks, though I need to observe and research this more. It may also explain why NEM tends to be such a good lead indicator for HUI and the XAU.
Since SPX appears like it's about to do an Elliot Wave A plunge of an A, B, C monthly downcycle that should drag HUI, NEM, and the XAU down with it. So, right now I don't see HUI, NEM, and the XAU making higher monthly cycle highs because of SPX, but the fact that the NEM Lead Indicator has been very bullish recently makes things interesting. The timing of SPX's Elliot Wave B up may be important depending on how much HUI, NEM, and the XAU have fallen when it begins. It appears, right now at least, that HUI, NEM, and the XAU's monthly cycle highs occurred on Monday and that a headfake higher monthly cycle high due to SPX index funds buying NEM won't occur in this monthly cycle.
The NEM Lead Indicator has been very bullish recently at -0.20% so far today, +1.46% yesterday vs the XAU and +0.38% on Monday 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, potentially 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.
XAU Implied Volatility fell to 33.820 yesterday from 33.945 on 12-12 vs a slight -0.02% decline in the XAU yesterday which is a modest rise in complacency that correctly portended some weakness today.The XAU Put/Call Ratio correctly pointed to some strength (an uptrend) today by rising to 0.90550 from 0.90467 yesterday. Ciao
http://finance.yahoo.com/q/ta?t=3m&s=%5EXAU&l=off&z=l&q=b&a=m26-12-9&a=p12&a=fs&a=w14&c=nem%2C+%5Ehui&c=%5EGSPC
In the chart at the link above note that SPX's late September rally coincided with HUI, NEM, and the XAU's, then SPX turned down and so did HUI, NEM, and the XAU. SPX hit a monthly cycle low in early October, about a week before HUI and the XAU (NEM bottomed on 11-4 due to the PDG bid by Barrick), and much of their monthly upcycles coincided. SPX's monthly upcycle is rolling over now as is HUI, NEM, and the XAU's which may have peaked on Monday. The point is that SPX index funds, because they are a huge factor due to buying and selling NEM (NEM is in SPX ), probably make SPX a good lead indicator for gold/silver stocks, though I need to observe and research this more. It may also explain why NEM tends to be such a good lead indicator for HUI and the XAU.
Since SPX appears like it's about to do an Elliot Wave A plunge of an A, B, C monthly downcycle that should drag HUI, NEM, and the XAU down with it. So, right now I don't see HUI, NEM, and the XAU making higher monthly cycle highs because of SPX, but the fact that the NEM Lead Indicator has been very bullish recently makes things interesting. The timing of SPX's Elliot Wave B up may be important depending on how much HUI, NEM, and the XAU have fallen when it begins. It appears, right now at least, that HUI, NEM, and the XAU's monthly cycle highs occurred on Monday and that a headfake higher monthly cycle high due to SPX index funds buying NEM won't occur in this monthly cycle.
The NEM Lead Indicator has been very bullish recently at -0.20% so far today, +1.46% yesterday vs the XAU and +0.38% on Monday 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, potentially 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.
XAU Implied Volatility fell to 33.820 yesterday from 33.945 on 12-12 vs a slight -0.02% decline in the XAU yesterday which is a modest rise in complacency that correctly portended some weakness today.The XAU Put/Call Ratio correctly pointed to some strength (an uptrend) today by rising to 0.90550 from 0.90467 yesterday. Ciao
posted by Joe Ferrazzano at
6:56 AM
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