SPX Weakness Is Likely To Bring A Sharp Decline Today
The Wave 4 short term downcycle began on 4-6 for HUI/NEM/XAU. NEM filled it's upside gap at 54.05 from Friday during yesterday's session, while the XAU didn't, which confirms that it's a breakaway gap. Based on S & P 500 (SPX) weakness right now it appears that gold stocks will fall sharply soon due to index fund selling. On an intraday and very short term cycle basis SPX tends to have a huge impact on HUI/NEM (SPX component)/XAU. A substantial decline is likely in Wave 4 to correct HUI/XAU's big Wave 3 short term upcycle that peaked last Thursday. See http://finance.yahoo.com/q/ta?s=%5Exau&t=5d&l=off&z=l&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=
The major upcycle (since 5-16-05) is in Wave 5, so the surprises will tend to be to the upside.The major upcycle's (since 5-16-05) Wave 5 2% follow through minor intermediate term cycle buy signal occurred on Tuesday 3-14, so the major upcycle's (since 5-16-05) Wave 5 minor intermediate term upcycle began on 3-10-06 for HUI/NEM/XAU as did a shorter monthly upcycle.
The NEM Lead Indicator is a bearish -0.45% vs the XAU right now, was a bullish +0.69% on 4-10, was a neutral +0.08% on 4-7, was a neutral -0.03% on 4-6, was a bullish +0.80% on 4-5, was a bullish +0.39% on 4-4, was a very bearish -2.26% on 4-3, and a bearish -0.87% on 3-31. The XAU has downside gaps at 144.91 from 4-11, at 141.62 from 4-3, at 138.84 from 3-30, at 134.17 from 3-29, at Monday 3-27's open at 133.40 and one at 3-24's open at 130.03, and, NEM has one at 49.46 from 3-27 and one at 49.24 from 3-24, some of which will get filled soon.
NEM's cycle low on Friday 3-10 at 46.60 was less than 1% below my Wave 4 cycle low target range of 47-49, while HUI's cycle low on Friday at 278.47 was well above my Wave 4 cycle low target range of 255-265, but the XAU's cycle low on Friday at 121.76 was near the top of my Wave 4 cycle low target range of 117-122. HUI's major upcycle (since 5-16-05) Wave 5, that should also be a Cyclical Bull Market cycle high for the first of three Cyclical Bull Markets (3 Elliot Wave upcycles and 2 downcycles/Cyclical Bear Markets) in this Secular gold/silver stock Bull Market that began in late 2000, should peak in the 400-450+ range. See latest charts: http://www.joefrocks.com/GoldStockCharts.html .
XAU Implied Volatility rose +2.60% to 35.065 on Monday 4-10 from 34.175 on Friday 4-7 versus a -0.38% decline in the XAU on 4-10, which is a sharp (2-2.99%) +2.22% rise in fear (+2.60% + -0.38% = +2.22%. The XAU wall of worry grew by +2.22%, therefore fear rose by +2.22%) that portends strength/an uptrend during part of Tuesday 4-11's session. The XAU Put/Call Ratio (April Expiration) fell a significant (o.50-1.99%) -1.23% today to 1.04317 from 1.05616 on Monday that portends some weakness today, because it's a significant rise in complacency. The Fed spiked the punch as usual last Thursday: http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE ...................... http://www.JoeFRocks.com/
The major upcycle (since 5-16-05) is in Wave 5, so the surprises will tend to be to the upside.The major upcycle's (since 5-16-05) Wave 5 2% follow through minor intermediate term cycle buy signal occurred on Tuesday 3-14, so the major upcycle's (since 5-16-05) Wave 5 minor intermediate term upcycle began on 3-10-06 for HUI/NEM/XAU as did a shorter monthly upcycle.
The NEM Lead Indicator is a bearish -0.45% vs the XAU right now, was a bullish +0.69% on 4-10, was a neutral +0.08% on 4-7, was a neutral -0.03% on 4-6, was a bullish +0.80% on 4-5, was a bullish +0.39% on 4-4, was a very bearish -2.26% on 4-3, and a bearish -0.87% on 3-31. The XAU has downside gaps at 144.91 from 4-11, at 141.62 from 4-3, at 138.84 from 3-30, at 134.17 from 3-29, at Monday 3-27's open at 133.40 and one at 3-24's open at 130.03, and, NEM has one at 49.46 from 3-27 and one at 49.24 from 3-24, some of which will get filled soon.
NEM's cycle low on Friday 3-10 at 46.60 was less than 1% below my Wave 4 cycle low target range of 47-49, while HUI's cycle low on Friday at 278.47 was well above my Wave 4 cycle low target range of 255-265, but the XAU's cycle low on Friday at 121.76 was near the top of my Wave 4 cycle low target range of 117-122. HUI's major upcycle (since 5-16-05) Wave 5, that should also be a Cyclical Bull Market cycle high for the first of three Cyclical Bull Markets (3 Elliot Wave upcycles and 2 downcycles/Cyclical Bear Markets) in this Secular gold/silver stock Bull Market that began in late 2000, should peak in the 400-450+ range. See latest charts: http://www.joefrocks.com/GoldStockCharts.html .
XAU Implied Volatility rose +2.60% to 35.065 on Monday 4-10 from 34.175 on Friday 4-7 versus a -0.38% decline in the XAU on 4-10, which is a sharp (2-2.99%) +2.22% rise in fear (+2.60% + -0.38% = +2.22%. The XAU wall of worry grew by +2.22%, therefore fear rose by +2.22%) that portends strength/an uptrend during part of Tuesday 4-11's session. The XAU Put/Call Ratio (April Expiration) fell a significant (o.50-1.99%) -1.23% today to 1.04317 from 1.05616 on Monday that portends some weakness today, because it's a significant rise in complacency. The Fed spiked the punch as usual last Thursday: http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE ...................... http://www.JoeFRocks.com/
posted by Joe Ferrazzano at
7:37 AM
3 Comments:
Buckle up!
By
Joe Ferrazzano, at 10:13 AM
"Jeff,
FYI, everything I'm reading is saying the bottom between April 17-19 and a top around 5/9. Then a bottom around 5/19, top around 6/2. Upside corrections in the 15-18% and downs from 5-9%.
Comments?"
Trying to forcast an existing cycle is hard enough - going too far on short term cycles feels to me like the trap of trying to tell the market what to do, instead of letting it tell you what it's doing.
The April 17 range sounds about what I would guess for the end of the monthly wave 4.
Sounds like you are forecasting a monthly top within the longer wave 5 on May 9, and then the monthly ABC down for 2 weeks, and then the big wave 5 blowoff corresponding with the next monthly cycle.
Thus the end of the big cycle.
It's possible, but I would never be so bold as to pin dates to it six weeks out.
By
Jeff, at 11:32 AM
Yes, forget about trying to determine short term cycle dates weeks in advance and gauge them as they unfold.
By
Joe Ferrazzano, at 12:55 PM
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