...............................Watch That 800 Lb Gorilla!
SPX (S & P 500) drives index fund trading and therefore HUI, NEM (in SPX), and the XAU. See
http://finance.yahoo.com/q/ta?t=5d&s=%5EXAU&l=off&z=l&q=b&a=m26-12-9&a=p12&a=fs&a=w14&c=%5Ehui%2C+nem&c=%5EGSPC
HUI and NEM probably put in monthly/minor int term cycle highs today while the XAU peaked on 12-12. This monthly cycle has been similar to the prior one, where index funds led to monthly cycle highs in rollover mode in late September, then index funds were major contributors to the sharp decline that occurred in the first three weeks of October, until October 20, when HUI and the XAU hit monthly cycle lows.
NEM underperformed the XAU today by -0.14% which points to more weakness tomorrow, as does the fact that VIX, the SPX Volatility Index (gauge of SPX options implied volatility), rose an unusually large 13% or so today which is an unusually large rise in fear that portends near term weakness. The modest strength that SPX had most of last week ended early today, and, SPX's significant decline today led to sharp declines in HUI, NEM, and the XAU from their early highs in plus territory. Relatively modest changes in SPX lead to significant moves in gold/silver stocks because index funds are a huge market. Basically nothing has changed from my latest weekly update and the target ranges for the monthly cycle lows remain unchanged at 240-250 for HUI, 45.50-47.50 for NEM, and 110-115 for the XAU in the next few weeks. Ciao
http://finance.yahoo.com/q/ta?t=5d&s=%5EXAU&l=off&z=l&q=b&a=m26-12-9&a=p12&a=fs&a=w14&c=%5Ehui%2C+nem&c=%5EGSPC
HUI and NEM probably put in monthly/minor int term cycle highs today while the XAU peaked on 12-12. This monthly cycle has been similar to the prior one, where index funds led to monthly cycle highs in rollover mode in late September, then index funds were major contributors to the sharp decline that occurred in the first three weeks of October, until October 20, when HUI and the XAU hit monthly cycle lows.
NEM underperformed the XAU today by -0.14% which points to more weakness tomorrow, as does the fact that VIX, the SPX Volatility Index (gauge of SPX options implied volatility), rose an unusually large 13% or so today which is an unusually large rise in fear that portends near term weakness. The modest strength that SPX had most of last week ended early today, and, SPX's significant decline today led to sharp declines in HUI, NEM, and the XAU from their early highs in plus territory. Relatively modest changes in SPX lead to significant moves in gold/silver stocks because index funds are a huge market. Basically nothing has changed from my latest weekly update and the target ranges for the monthly cycle lows remain unchanged at 240-250 for HUI, 45.50-47.50 for NEM, and 110-115 for the XAU in the next few weeks. Ciao
posted by Joe Ferrazzano at
1:11 PM
5 Comments:
POG is so strong this am that I'd be especially surprised if the stocks decline today, barring a large drop in POG later today. It will tell us a lot, though, if the stocks at least underperform the metal, leading down in a relative sense. That would tell me that gold is still in its B up, not starting a new cycle, and has a full C down to go.
Gold looks like it really wants to make a break for fundamental reasons and probably also because of some strange delivery trends on the comex, but is a little constrained in that it is fighting B up limits of its own cycle here.
By
Jeff, at 5:57 AM
Jeff,
HUI and NEM hit monthly cycle highs yesterday and the XAU did so on 12-12. Today's rebound is the monthly downcycle beginning relatively flat. Gold is doing an EW B up in a monthly downcycle, so we agree on that. I'll gladly write a testimonial for your new site. I think you should consider posting your work for non subscribers in delayed fashion, because, how will you get new subscribers if they can't see your work? Glad you'll finally have a site and good luck! You're the only other timer I read regularly because your work and system/research are outstanding. Ciao. Joe
By
Joe Ferrazzano, at 6:53 AM
This comment has been removed by a blog administrator.
By
Jeff, at 7:01 AM
Joe,
I'm not THAT Jeff. I'm just a small town lawyer (ex-economist) and gold investor. But if you want to do a testimonial for my site, I'll start one! All I have is an email group of about 6 people who share analysis.
By
Jeff, at 7:02 AM
Had me fooled! Ok Jeff.
By
Joe Ferrazzano, at 7:14 AM
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