Let's Hope For A "Nice Clean" Monthly Downcycle
and hope that I didn't just jinx it. The Wave 4 minor intermediate term downcycle from 1-31-06 until 3-10-06 bottomed shortly/maybe an hour or less after the XAU filled it's downside gap at 122.49 from 12-22, which was the last of NEM/XAU's recently created downside gaps. So, if NEM fills it's last recently created downside gap at 49.24 and the XAU fills it's last recently created downside gap at 130.03 it should be a great time to pile in if the indicators/COT data/I Watch, etc. are reasonably bullish. I'll probably pile in if that happens. The NEM Lead Indicator should turn very bullish vs the XAU near the bottom, and, watch those gaps like a hawk. ....... http://www.JoeFRocks.com/
posted by Joe Ferrazzano at
2:48 PM
4 Comments:
Garry, given how bearish the NEM Lead Indicator has become in recent months and how much NEM sell interest there's been at Lycos Thomson I Watch the past few weeks a 20% correction won't be too surprising. There's a nasty correction nearly every Spring.
By
Joe Ferrazzano, at 7:03 PM
Garry, it sounds like you're hoping you get bailed out of those May Calls. The signs strongly point to a 10-20% decline in the next few weeks. Note that HUI/XAU failed to exceed their 4-19 cycle highs so far. At best they make higher cycle highs in rollover mode then plunge, but a monthly downcycle must occur.
By
Joe Ferrazzano, at 8:05 PM
I hope I'm wrong, because I like having predictors, but we may be in a period where global events are trumping the cycles, or (when they coincide) exacerbating them. I've long said that POG holding the important 650 area means war. That may be off to the low side now because of the oil effect, but commodities trends may be dominating POG so much that it's muting the cycles or making them worse, depending where they fall. This would make them harder to predict with the trend lines.
Particularly I note the recent two week period where gold rose well but stocks sold off a little and then under-moved vis-a-vis POG.
If the fundamentals turn ugly, though, a 20 percent drop could occur where there should only be a 10 percent drop for the same reasons.
By
Jeff, at 6:00 PM
Arrgh! Calls are still not on the right side of the monthlies, and stocks can still undermove gold or move down worse in a short correction. That said, it would suck to miss the next spike up. I'm not trading short term for now because volatility is so high, and I won't always be near a computer to trade.
It's going to be a challenge for POG to shoot up again without either consolidation or a correction. Such a consolidation or correction in POG, if it occurs, will give us a good chance to observe the relative moves of POG versus the stocks to get us back into cycle sync.
By
Jeff, at 7:43 PM
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