SPX (S & P 500) Gaps Up And SPX Component NEM Gaps Up
For the fifth consecutive session SPX has gapped up or down in sync with NEM, HUI, and the XAU. SPX drives index funds which have a profound affect on the short term/weekly and monthly movements of many sectors, including gold/silver stocks. XAU Implied Volatility and the XAU Put/Call Ratio point to weakness and there are downside gaps to fill. The NEM Lead Indicator is modestly bearish right now at about -0.20%, so NEM, HUI, and the XAU may fall hard today.
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 Rapid very modest % moves in SPX cause rapid significant moves in NEM and other gold/silver stocks in the many indices affected by SPX. Because SPX is probably about to enter the parabolic part of it's monthly downcycle after being very flat, actually rising during much of the gold/silver stock strength in the short term and the minor int term upcycles, SPX should soon bring an end to the minor int term upcycle since 10-20 for HUI/XAU.
The NEM Lead Indicator is modestly bearish right now at about -0.20% after being bullish on Friday at +0.64% vs the XAU. Keep in mind that indicators portend more strength in short term upcycles versus downcycles and of course the monthly cycle has probably turned down or at least rolled over dramatically, so less strength is likely in a monthly downcycle than a monthly upcycle, which is another consideration.
XAU Implied Volatility rose +0.30% to 30.350 on Friday 12-30 from 30.260 on 12-29 versus a -1.18% decline in the XAU on 12-30, which is a significant (0.50-1.99%) 0.88% rise in complacency (+0.30% + -1.18% = -0.88%. The XAU wall of worry shrank by -0.88%, therefore complacency rose by +0.88%) that portends weakness/a downtrend during part of Tuesday 1-3's session.
The XAU Put/Call Ratio fell a significant (0.50-1.99%) -0.87% today to 1.02423 from 1.03318 on 12-30 which portends some weakness today.
The latest COT (Commitments Of Traders) data is modestly bullish (as of 12-27-05) short term since the gold Commercial Traders traded net long and the gold Speculators traded net short, which jives with gold being in Elliot Wave B up of an Elliot Wave A, B, C minor intermediate term downcycle (see 1 year chart), but the significant long liquidation by the Commercial Traders points to some short term weakness. The gold Commercial Traders sold 1381 (sold 8157 the prior week, added 11,405 the prior week, sold 14,042 the prior week, added 17,312 the prior week) long futures and options contracts and covered 2036 (added 4202, 2623 the prior two weeks, covered 5276 the prior week, added 16,229 the prior week) short futures and options contracts which portends strength this week (non contrarian indicator), but the significant long liquidation points to some weakness. The gold Speculators (hedge funds and other speculators/traders) sold 3988 (sold 5112, 19,247 the prior two weeks, added 9102 the prior week, sold 2697 the prior week) long futures and options contracts and covered 1535 (covered 7432, 8720 the prior two weeks, added 566, 2309 the prior two weeks) short futures and options contracts which portends strength this week (contrarian indicator). The most important consideration in timing any market is the cycle channels/trendlines (see charts below). 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 Rapid very modest % moves in SPX cause rapid significant moves in NEM and other gold/silver stocks in the many indices affected by SPX. Because SPX is probably about to enter the parabolic part of it's monthly downcycle after being very flat, actually rising during much of the gold/silver stock strength in the short term and the minor int term upcycles, SPX should soon bring an end to the minor int term upcycle since 10-20 for HUI/XAU.
The NEM Lead Indicator is modestly bearish right now at about -0.20% after being bullish on Friday at +0.64% vs the XAU. Keep in mind that indicators portend more strength in short term upcycles versus downcycles and of course the monthly cycle has probably turned down or at least rolled over dramatically, so less strength is likely in a monthly downcycle than a monthly upcycle, which is another consideration.
XAU Implied Volatility rose +0.30% to 30.350 on Friday 12-30 from 30.260 on 12-29 versus a -1.18% decline in the XAU on 12-30, which is a significant (0.50-1.99%) 0.88% rise in complacency (+0.30% + -1.18% = -0.88%. The XAU wall of worry shrank by -0.88%, therefore complacency rose by +0.88%) that portends weakness/a downtrend during part of Tuesday 1-3's session.
The XAU Put/Call Ratio fell a significant (0.50-1.99%) -0.87% today to 1.02423 from 1.03318 on 12-30 which portends some weakness today.
The latest COT (Commitments Of Traders) data is modestly bullish (as of 12-27-05) short term since the gold Commercial Traders traded net long and the gold Speculators traded net short, which jives with gold being in Elliot Wave B up of an Elliot Wave A, B, C minor intermediate term downcycle (see 1 year chart), but the significant long liquidation by the Commercial Traders points to some short term weakness. The gold Commercial Traders sold 1381 (sold 8157 the prior week, added 11,405 the prior week, sold 14,042 the prior week, added 17,312 the prior week) long futures and options contracts and covered 2036 (added 4202, 2623 the prior two weeks, covered 5276 the prior week, added 16,229 the prior week) short futures and options contracts which portends strength this week (non contrarian indicator), but the significant long liquidation points to some weakness. The gold Speculators (hedge funds and other speculators/traders) sold 3988 (sold 5112, 19,247 the prior two weeks, added 9102 the prior week, sold 2697 the prior week) long futures and options contracts and covered 1535 (covered 7432, 8720 the prior two weeks, added 566, 2309 the prior two weeks) short futures and options contracts which portends strength this week (contrarian indicator). The most important consideration in timing any market is the cycle channels/trendlines (see charts below). Ciao
posted by Joe Ferrazzano at
6:42 AM
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