NEM Appears To Have Put In A Slightly Lower Cycle High Today
at 58.37 vs 58.40 on Friday, so the index trading orgy of recent weeks may have finally ended. The XAU and HUI put in slightly lower cycle highs but they tend to lag so they may take out Friday's cycle highs even if NEM has peaked. The cycle highs for this minor int term cycle appear to be the Elliot Wave 3 cycle highs for the major upcycle since 5-16-05, so they are important though not major/final cycle highs for the major upcycle.
The Fed's lending (see link) that drives index fund trading was well below the recent +$12.00 Billion daily average on Friday (+$5.75 Billion Repo) and today (+$7.00 Billion Repo) which points to weakness.
http://www.newyorkfed.org/markets/omo/dmm/temp.cfm
XAU Implied Volatility points to some strength today and there was an XAU upside gap to fill created at today's open. The XAU Put/Call Ratio and the NEM Lead Indicator, because it was very bearish at -1.46% vs the XAU on Friday, point to weakness as discussed later, so it looks like weakness will set in soon.
http://finance.yahoo.com/q/ta?s=%5EGSPC&t=5d&l=off&z=l&q=b&p=&a=m26-12-9,m26-12-9,p12,m26-12-9,p12,fs,m26-12-9,p12,fs,w14&c=NEM,%5EXAU,%5EHUI SPX drives index funds which have a profound affect on the short term/weekly and monthly movements of many sectors, including gold/silver stocks. The largest traders of NEM and other gold/silver stocks found in the various indexes are index fund traders, AND, they tend to trade at THE SAME TIME which is huge. The cycles are vastly different for gold/silver stocks and SPX since gold/silver stocks are in a very long term upcycle since Oct/Nov 2000 and SPX is in a very long term downcycle since March 2000.
The NEM Lead Indicator is bullish right now at about +0.70% vs the XAU, but was a very bearish -1.46% on Friday. The New Year's spike move was dumb money/mindless index fund buying which also led to short covering. The best time to buy is after a 10-15% plunge and a minor int term cycle low has occurred near or at an oversold condition, not at very overbought levels. Keep in mind that indicators portend more strength in upcycles versus downcycles.
See http://www.joefrocks.com/TradetheCycles.html for the weekly update. Scroll down a few pages past the major averages work to see the gold/silver stock work. See http://www.joefrocks.com/GoldStockCharts.html for all the charts. My home page is http://www.JoeFRocks.com/ I hope you'll take the time to e mail your friends re this Blog and my site/work/system. This will help to keep my work free, because the more visitors I get the more advertising $ I make. I have a long way to go but have made significant progress in recent months. Thank you.
http://finance.yahoo.com/q/ta?s=%5EGSPC&t=5d&l=off&z=l&q=b&p=&a=m26-12-9,m26-12-9,p12,m26-12-9,p12,fs,m26-12-9,p12,fs,w14&c=NEM,%5EXAU,%5EHUI Rapid very modest % moves in SPX cause rapid significant moves in NEM and other gold/silver stocks in the many indices affected by SPX.
XAU Implied Volatility rose +0.11% to 32.575 on Friday 1-6 from 32.540 on 1-5 versus a +3.30% rise in the XAU on 1-6, which is a very sharp (3-6%) +3.41% rise in fear (+0.11% + +3.30% = +3.41%. The XAU wall of worry grew by +3.41%, therefore fear rose by +3.41%) that portends strength/an uptrend during part of Monday 1-9's session.
The XAU Put/Call Ratio fell a very sharp (3-6%) -5.33% today to 0.98131 from 1.03654 on 1-6 which portends some weakness today because it's a very sharp (3-6%) rise in complacency.
The latest COT data (as of 1-3-06) is modestly bullish short term since the gold Commercial Traders traded net long and the gold Speculators traded net short, which jives with gold being in (or having been in at the time the data was released) Elliot Wave B up of an Elliot Wave A, B, C minor intermediate term downcycle (see 1 year chart), but the significant short selling by the Commercial Traders points to some short term weakness. The gold Commercial Traders added a large 6357 (sold 1381, 8157 the prior two weeks, added 11,405 the prior week, sold 14,042 the prior week, added 17,312 the prior week) long futures and options contracts and added 3299 (covered 2036 the prior week, added 4202, 2623 the prior two weeks, covered 5276 the prior week) short futures and options contracts which portends strength this week (non contrarian indicator), but the significant short selling points to some weakness. The gold Speculators (hedge funds and other speculators/traders) added 1521 (sold 3988, 5112, 19,247 the prior three weeks, added 9102 the prior week, sold 2697 the prior week) long futures and options contracts and added an unusually large (> 10% increase in short contracts) 5824 (covered 1535, 7432, 8720 the prior three weeks, added 566, 2309 the prior two weeks) short futures and options contracts which portends weakness this week (contrarian indicator), because the unusually large short selling is a short term non contrarian indication. The most important consideration in timing any market is the cycle channels/trendlines (see charts below). Ciao
The Fed's lending (see link) that drives index fund trading was well below the recent +$12.00 Billion daily average on Friday (+$5.75 Billion Repo) and today (+$7.00 Billion Repo) which points to weakness.
http://www.newyorkfed.org/markets/omo/dmm/temp.cfm
XAU Implied Volatility points to some strength today and there was an XAU upside gap to fill created at today's open. The XAU Put/Call Ratio and the NEM Lead Indicator, because it was very bearish at -1.46% vs the XAU on Friday, point to weakness as discussed later, so it looks like weakness will set in soon.
http://finance.yahoo.com/q/ta?s=%5EGSPC&t=5d&l=off&z=l&q=b&p=&a=m26-12-9,m26-12-9,p12,m26-12-9,p12,fs,m26-12-9,p12,fs,w14&c=NEM,%5EXAU,%5EHUI SPX drives index funds which have a profound affect on the short term/weekly and monthly movements of many sectors, including gold/silver stocks. The largest traders of NEM and other gold/silver stocks found in the various indexes are index fund traders, AND, they tend to trade at THE SAME TIME which is huge. The cycles are vastly different for gold/silver stocks and SPX since gold/silver stocks are in a very long term upcycle since Oct/Nov 2000 and SPX is in a very long term downcycle since March 2000.
The NEM Lead Indicator is bullish right now at about +0.70% vs the XAU, but was a very bearish -1.46% on Friday. The New Year's spike move was dumb money/mindless index fund buying which also led to short covering. The best time to buy is after a 10-15% plunge and a minor int term cycle low has occurred near or at an oversold condition, not at very overbought levels. Keep in mind that indicators portend more strength in upcycles versus downcycles.
See http://www.joefrocks.com/TradetheCycles.html for the weekly update. Scroll down a few pages past the major averages work to see the gold/silver stock work. See http://www.joefrocks.com/GoldStockCharts.html for all the charts. My home page is http://www.JoeFRocks.com/ I hope you'll take the time to e mail your friends re this Blog and my site/work/system. This will help to keep my work free, because the more visitors I get the more advertising $ I make. I have a long way to go but have made significant progress in recent months. Thank you.
http://finance.yahoo.com/q/ta?s=%5EGSPC&t=5d&l=off&z=l&q=b&p=&a=m26-12-9,m26-12-9,p12,m26-12-9,p12,fs,m26-12-9,p12,fs,w14&c=NEM,%5EXAU,%5EHUI Rapid very modest % moves in SPX cause rapid significant moves in NEM and other gold/silver stocks in the many indices affected by SPX.
XAU Implied Volatility rose +0.11% to 32.575 on Friday 1-6 from 32.540 on 1-5 versus a +3.30% rise in the XAU on 1-6, which is a very sharp (3-6%) +3.41% rise in fear (+0.11% + +3.30% = +3.41%. The XAU wall of worry grew by +3.41%, therefore fear rose by +3.41%) that portends strength/an uptrend during part of Monday 1-9's session.
The XAU Put/Call Ratio fell a very sharp (3-6%) -5.33% today to 0.98131 from 1.03654 on 1-6 which portends some weakness today because it's a very sharp (3-6%) rise in complacency.
The latest COT data (as of 1-3-06) is modestly bullish short term since the gold Commercial Traders traded net long and the gold Speculators traded net short, which jives with gold being in (or having been in at the time the data was released) Elliot Wave B up of an Elliot Wave A, B, C minor intermediate term downcycle (see 1 year chart), but the significant short selling by the Commercial Traders points to some short term weakness. The gold Commercial Traders added a large 6357 (sold 1381, 8157 the prior two weeks, added 11,405 the prior week, sold 14,042 the prior week, added 17,312 the prior week) long futures and options contracts and added 3299 (covered 2036 the prior week, added 4202, 2623 the prior two weeks, covered 5276 the prior week) short futures and options contracts which portends strength this week (non contrarian indicator), but the significant short selling points to some weakness. The gold Speculators (hedge funds and other speculators/traders) added 1521 (sold 3988, 5112, 19,247 the prior three weeks, added 9102 the prior week, sold 2697 the prior week) long futures and options contracts and added an unusually large (> 10% increase in short contracts) 5824 (covered 1535, 7432, 8720 the prior three weeks, added 566, 2309 the prior two weeks) short futures and options contracts which portends weakness this week (contrarian indicator), because the unusually large short selling is a short term non contrarian indication. The most important consideration in timing any market is the cycle channels/trendlines (see charts below). Ciao
posted by Joe Ferrazzano at
7:34 AM
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