Trade the Cycles

Monday, April 17, 2006

The Wave 5 Short Term Upcycle Began Last Wednesday

for HUI/NEM/XAU, see http://finance.yahoo.com/q/ta?t=5d&l=off&z=m&q=c&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=&s=%5Exau , NEM sell interest is strong again (see link below) today, but the NEM Lead Indicator is bullish so far today at +0.80% vs the XAU, and, NEM and the XAU have what appear to be breakaway gaps to the upside today. It seems risky to be long short term given the strong sell interest in NEM for over a week. I need to do more analysis. Ciao
http://thomson.finance.lycos.com/lycos/iwatch/cgi-bin/iw_ticker?t=NEM&range=0&mgp=0&i=2&hdate=&x=7&y=8 ....... http://www.JoeFRocks.com/

posted by Joe Ferrazzano at 10:27 AM

5 Comments:

  • I'm a little hesitant to mark the turnaround there. Stocks are still underperforming in a relative sense. I would expect HUI and XAU to be rising at twice or more the rate of the metal, but instead the stocks are barely keeping pace. Seems like AU is in an upwave, but the stocks are being dragged kicking and screaming against their own trend.

    By Blogger Jeff, at 11:26 AM  

  • Jeff, it looks like an anemic Wave 5 Short Term Upcycle/brief spike, but I need to put more thought into it. The 3 month NEM Lead Indicator is very bearish right now and NEM sell interest at Lycos Thomson I Watch has been strong for over a week. I'd be scared to be long now. Ciao

    By Blogger Joe Ferrazzano, at 12:01 PM  

  • We may look back at this as either a trend break due to geopolitics or a B up.

    I'm not convinced enough that I'm right to put on shorts against the longer cycles, but this does look like it would be a trap buying into it, too.

    In a 5-5 up, I'm thinking that the stocks should overshoot more than the metals (it's easier for new longs to spec with stocks), and that isn't happening.

    By Blogger Jeff, at 12:24 PM  

  • Jeff, the metals tend to lag, so their dramatic spike probably points to an imminent downturn for the monthly cycle. It makes sense for the metals to be spiking more than the stocks because they lag. But, both seem to be in an important blowoff spike and appear to be in the process of putting in monthly cycle highs. I thought Wave 4 down would be sharper, but, instead it may be a brief spike/anemic Wave 5 Short Term Upcycle.

    By Blogger Joe Ferrazzano, at 12:45 PM  

  • That would be anemic.

    By Blogger Jeff, at 1:10 PM  

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