.............Yesterday's Spike Move Is Correcting
One rarely should chase spike moves such as yesterday's and typically would wait for a pullback.
In the XAU's 5 day chart http://finance.yahoo.com/q/ta?s=%5EXAU&t=5d&l=off&z=m&q=b&p=&a=m26-12-9,p12,fs,w14&c= one can see that the XAU is trying to put in an intraday cycle low right now and of course a short term cycle low occurred two days ago literally just before the close.
NEM has been modestly underperforming the XAU early, leading to the downside as usual. If you're looking to buy today you probably should wait for NEM to outperform the XAU, preferably by a wide margin of 0.50%+. But, as I've said before, you have to look at the cycle trendlines for the stocks you're trading. Most gold/silver stocks cycles follow HUI, NEM, and the XAU fairly closely at least as far as monthly cycles are concerned.
This monthly upcycle Elliot Wave 5 short term upcycle that began two days ago should last a few more days and could be a monster lasting over a week if NEM breaks above major resistance a bit below 50 (connect the peaks since the long term cycle high at 50.28 on 12-2-03). At the very least NEM should exceed it's previous monthly cycle high above 48 that occurred on 9-30-05.
XAU Implied Volatility implies strength today, falling modestly to 29.760 yesterday from 29.825 on 11-30 vs a very sharp +3.08% rise in the XAU yesterday, which is a very sharp rise in fear that portends strength today. The XAU Put/Call Ratio fell an unusually large (> 6%) -8.27% today to 0.61331 from 0.66857 on 12-1, which is an unusually large rise in complacency that portends strength today. The most important consideration today though is to wait for an intraday/very short term cycle low to occur. Cycle trendlines are the primary market timing consideration as I've said many times in the weekly updates. Stay tuned and good luck.
In the XAU's 5 day chart http://finance.yahoo.com/q/ta?s=%5EXAU&t=5d&l=off&z=m&q=b&p=&a=m26-12-9,p12,fs,w14&c= one can see that the XAU is trying to put in an intraday cycle low right now and of course a short term cycle low occurred two days ago literally just before the close.
NEM has been modestly underperforming the XAU early, leading to the downside as usual. If you're looking to buy today you probably should wait for NEM to outperform the XAU, preferably by a wide margin of 0.50%+. But, as I've said before, you have to look at the cycle trendlines for the stocks you're trading. Most gold/silver stocks cycles follow HUI, NEM, and the XAU fairly closely at least as far as monthly cycles are concerned.
This monthly upcycle Elliot Wave 5 short term upcycle that began two days ago should last a few more days and could be a monster lasting over a week if NEM breaks above major resistance a bit below 50 (connect the peaks since the long term cycle high at 50.28 on 12-2-03). At the very least NEM should exceed it's previous monthly cycle high above 48 that occurred on 9-30-05.
XAU Implied Volatility implies strength today, falling modestly to 29.760 yesterday from 29.825 on 11-30 vs a very sharp +3.08% rise in the XAU yesterday, which is a very sharp rise in fear that portends strength today. The XAU Put/Call Ratio fell an unusually large (> 6%) -8.27% today to 0.61331 from 0.66857 on 12-1, which is an unusually large rise in complacency that portends strength today. The most important consideration today though is to wait for an intraday/very short term cycle low to occur. Cycle trendlines are the primary market timing consideration as I've said many times in the weekly updates. Stay tuned and good luck.
posted by Joe Ferrazzano at
6:58 AM
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