............More Downside Gap Filling Action Today
The XAU filled it's downside gap at 130.03 from 3-24 and NEM filled it's downside gap at 49.53 from 5-25. So, today might be an important monthly cycle low since all of the recently created downside gaps have been filled.
It's pretty obvious that long term cycle highs did occur on 5-11-06 for HUI at 401.69 and at 171.71 for the XAU, and, at 62.72 on 1-31-06 for reliable lead indicator NEM, for the long term upcycle that began on 5-10-04. "Trade the Cycles" worked well as usual. Those cycle highs are probably also Cyclical Bull Market cycle highs for the Wave 1 Cyclical Bull Market that began in late 2000 for HUI/NEM/XAU, which means that an 18-24 month Cyclical Bear Market is probably in effect for HUI/NEM/XAU, that corresponds to Wave 2 down of the Secular Bull Market/very long term upcycle that began in late 2000. Since many gold/silver stocks' cycles lag or are out of sync with HUI/NEM/XAU there are still a lot of good investing and trading opportunities in the sector. See charts at: http://www.joefrocks.com/GoldStockCharts.html with chart 8 being the very important very long term chart done in February.
Notice that today's weakness coincided with SPX (S & P 500) weakness: http://finance.yahoo.com/q/ta?t=5d&s=%5EXAU&l=off&z=m&q=c&a=m26-12-9&a=p12&a=fs&a=w14&c=&c=%5EGSPC.
The NEM Lead Indicator is a very bullish +1.00% vs the XAU right now, was a bullish +0.58% vs the XAU on 6-7, was a bullish +0.70% vs the XAU on 6-6, was a very bullish +1.30% on 6-5, and, was a very bullish +1.78% on 6-2. So, a substantial rebound is likely over the next few weeks, and, cycle highs should occur for HUI/XAU such that their Cyclical Bear Market downtrend lines begin relatively flat, as NEM's did after it peaked on 1-31-06.
The Fed spiked the punch as they always do on Thursday, with about $16 Billion in Repos, so there should be a sharp rebound at some point today and maybe today is the bottom for this ABC downcycle, that is also probably the start of an 18-24 month Cyclical Bear Market, so this isn't really a correction because it's probably the start of an 18-24 month downtrend/Wave 2 Cyclical Bear Market.
For recent action 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. Notice how closely the XAU tracked SPX (S & P 500) recently: http://finance.yahoo.com/q/ta?t=5d&s=%5EXAU&l=off&z=m&q=c&a=m26-12-9&a=p12&a=fs&a=w14&c=&c=%5EGSPC. ....... http://www.JoeFRocks.com/
It's pretty obvious that long term cycle highs did occur on 5-11-06 for HUI at 401.69 and at 171.71 for the XAU, and, at 62.72 on 1-31-06 for reliable lead indicator NEM, for the long term upcycle that began on 5-10-04. "Trade the Cycles" worked well as usual. Those cycle highs are probably also Cyclical Bull Market cycle highs for the Wave 1 Cyclical Bull Market that began in late 2000 for HUI/NEM/XAU, which means that an 18-24 month Cyclical Bear Market is probably in effect for HUI/NEM/XAU, that corresponds to Wave 2 down of the Secular Bull Market/very long term upcycle that began in late 2000. Since many gold/silver stocks' cycles lag or are out of sync with HUI/NEM/XAU there are still a lot of good investing and trading opportunities in the sector. See charts at: http://www.joefrocks.com/GoldStockCharts.html with chart 8 being the very important very long term chart done in February.
Notice that today's weakness coincided with SPX (S & P 500) weakness: http://finance.yahoo.com/q/ta?t=5d&s=%5EXAU&l=off&z=m&q=c&a=m26-12-9&a=p12&a=fs&a=w14&c=&c=%5EGSPC.
The NEM Lead Indicator is a very bullish +1.00% vs the XAU right now, was a bullish +0.58% vs the XAU on 6-7, was a bullish +0.70% vs the XAU on 6-6, was a very bullish +1.30% on 6-5, and, was a very bullish +1.78% on 6-2. So, a substantial rebound is likely over the next few weeks, and, cycle highs should occur for HUI/XAU such that their Cyclical Bear Market downtrend lines begin relatively flat, as NEM's did after it peaked on 1-31-06.
The Fed spiked the punch as they always do on Thursday, with about $16 Billion in Repos, so there should be a sharp rebound at some point today and maybe today is the bottom for this ABC downcycle, that is also probably the start of an 18-24 month Cyclical Bear Market, so this isn't really a correction because it's probably the start of an 18-24 month downtrend/Wave 2 Cyclical Bear Market.
For recent action 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. Notice how closely the XAU tracked SPX (S & P 500) recently: http://finance.yahoo.com/q/ta?t=5d&s=%5EXAU&l=off&z=m&q=c&a=m26-12-9&a=p12&a=fs&a=w14&c=&c=%5EGSPC. ....... http://www.JoeFRocks.com/
posted by Joe Ferrazzano at
7:33 AM
