SPX (S & P 500) Index Funds Are Buying NEM Early Today
Which means that other index funds are buying the gold/silver stocks in their index. SPX is up about 7 points right now. I'm hoping for enough of a pop in the XAU early today to where I'll want to buy some XAU Puts. A significant rally is likely because, thanks to the sharp decline of the prior two days (from the intraday high early on 12-19 in plus territory), HUI, NEM, and the XAU fell from the top of their monthly downcycle channels to the bottom, so they should bounce early today.
The most important thing to keep in mind now is that HUI, NEM, and the XAU entered the Elliot Wave C short term downcycle on 12-19 (of their monthly downcycles that began on 12-12). After a likely rebound today they should experience a dramatic decline during much of the remainder of the week, because this is the parabolic/sharply declining segment of the monthly downcycle. Monthly cycle lows may occur this week or early next week in the 235-245 (HUI), 45-47 (NEM), and 109-114 (XAU) target ranges, based on their major int term upcycle trendlines since 5-16-05.
SPX strength made SPX index funds buy NEM (and made other index funds buy other gold/silver stocks) and therefore led to general gold/silver stock strength early today, which should be short lived. http://finance.yahoo.com/q/ta?s=%5Exau&t=5d&l=off&z=l&q=b&p=&a=m26-12-9%2Cm26-12-9%2Cp12%2Cm26-12-9%2Cp12%2Cfs%2Cm26-12-9%2Cp12%2Cfs%2Cw14&c=%5EGSPC
The NEM Lead Indicator is bearish right now at -0.30% after being bearish yesterday at -0.50% vs the XAU. Keep in mind that indicators portend more strength in short term upcycles versus downcycles and of course the monthly cycle has turned down, so less strength is likely in a monthly downcycle than a monthly upcycle, which is another consideration. Also, this is the nasty parabolic Elliot Wave C short term downcycle where the most weakness occurs, which must be kept in mind when assessing the indicators.
XAU Implied Volatility fell -1.68% to 31.40 on Tuesday 12-20 from 31.935 on 12-19 versus a -1.39% decline in the XAU on 12-20, which is a very sharp (3-6%) 3.07% rise in complacency (-1.68% + -1.39% = -3.07%. The XAU wall of worry shrank by 3.07%, therefore complacency rose by +3.07%) that portends weakness/a downtrend during part of Wednesday 12-21's session.
The XAU Put/Call Ratio rose a significant (0.50-1.99%) 1.04% to 1.29733 today from 1.28392 on 12-20 which is a significant rise in fear that portends some strength today. Ciao
The most important thing to keep in mind now is that HUI, NEM, and the XAU entered the Elliot Wave C short term downcycle on 12-19 (of their monthly downcycles that began on 12-12). After a likely rebound today they should experience a dramatic decline during much of the remainder of the week, because this is the parabolic/sharply declining segment of the monthly downcycle. Monthly cycle lows may occur this week or early next week in the 235-245 (HUI), 45-47 (NEM), and 109-114 (XAU) target ranges, based on their major int term upcycle trendlines since 5-16-05.
SPX strength made SPX index funds buy NEM (and made other index funds buy other gold/silver stocks) and therefore led to general gold/silver stock strength early today, which should be short lived. http://finance.yahoo.com/q/ta?s=%5Exau&t=5d&l=off&z=l&q=b&p=&a=m26-12-9%2Cm26-12-9%2Cp12%2Cm26-12-9%2Cp12%2Cfs%2Cm26-12-9%2Cp12%2Cfs%2Cw14&c=%5EGSPC
The NEM Lead Indicator is bearish right now at -0.30% after being bearish yesterday at -0.50% vs the XAU. Keep in mind that indicators portend more strength in short term upcycles versus downcycles and of course the monthly cycle has turned down, so less strength is likely in a monthly downcycle than a monthly upcycle, which is another consideration. Also, this is the nasty parabolic Elliot Wave C short term downcycle where the most weakness occurs, which must be kept in mind when assessing the indicators.
XAU Implied Volatility fell -1.68% to 31.40 on Tuesday 12-20 from 31.935 on 12-19 versus a -1.39% decline in the XAU on 12-20, which is a very sharp (3-6%) 3.07% rise in complacency (-1.68% + -1.39% = -3.07%. The XAU wall of worry shrank by 3.07%, therefore complacency rose by +3.07%) that portends weakness/a downtrend during part of Wednesday 12-21's session.
The XAU Put/Call Ratio rose a significant (0.50-1.99%) 1.04% to 1.29733 today from 1.28392 on 12-20 which is a significant rise in fear that portends some strength today. Ciao
posted by Joe Ferrazzano at
6:47 AM
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