.......A Minor Alternate Scenario For HUI/XAU
The Wave 2 Cyclical Bear Market's (HUI/XAU since 5-11-06) Wave A down probably didn't bottom on 6-13, the question is did Wave A's Wave B up (of a likely ABC pattern) peak on 7-12 or will there be another monthly upcycle in which the XAU fills it's upside gap at 159.41 from 5-15? If that upside gap had been filled I'd be confident that 6-13's cycle lows would be taken out in this correction. Wave B up of the Cyclical Bear Market's (HUI/XAU since 5-11-06) Wave A down may turn out to be a minor intermediate term upcycle comprised of two monthly upcycles and the downcycle of the first monthly cycle rather than just the monthly upcycle that peaked last Wednesday 7-12 for HUI/XAU.
HUI/XAU Monthly Upcycle peaked 7-12, which means that the next few weeks may be Wave C down of the Wave 2 Cyclical Bear Market's (HUI/XAU since 5-11-06) Wave A down or Wave B may fill the XAU's upside gap at 159.41 before turning down, so, either way I expect lower cycle lows in the relatively near future than those that occurred on 6-13. Timewise if HUI and the XAU are in an 18 monthish Cyclical Bear Market it makes sense that Wave A hasn't bottomed yet.
The USD recently put in a major cycle low above the prior one, which means it's in a Cyclical Bull Market, that points to a Cyclical Bear Market for HUI/XAU as does the very bearish NEM Lead Indicator, with NEM hitting a likely Cyclical Bull Market cycle high on 1-31-06 versus 5-11-06 for HUI/XAU, and, the most recent long term upcycle was the third/Wave 5 long term upcycle of the Cyclical Bull Market since late 2000, so, it's likely that HUI/XAU began a Wave 2 Cyclical Bear Market on 5-11-06.
Timewise a Wave 2 Cyclical Bear Market is due because very long term secular Bull (or Bear) Markets last 15-20 years (the previous Bear Market for gold lasted 21 years), so, the Wave 1 Cyclical Bull Market since late 2000 was due to peak because it lasted about five and a half years for HUI/XAU and over five years for NEM. There should be two more Cyclical Bull Markets corresponding to Waves 3 and 5 and there should be two 18 monthish Cyclical Bear Markets corresponding to Waves 2 and 4 with Wave 2 probably in effect now.
Index fund trading is a huge factor that most are unaware of. Notice how closely HUI tracked SPX (S & P 500) recently: http://finance.yahoo.com/q/ta?t=5d&s=%5EHUI&l=off&z=m&q=c&a=m26-12-9&a=p12&a=fs&a=w14&c=&c=%5EGSPC.
Tuesday 6-13 was the bottom for (probably) Wave A down of the Wave 2 Cyclical Bear Market's Wave A down, that is also probably the start of an 18-24 month Cyclical Bear Market, so it wasn't really a correction because it's probably the start of an 18-24 month downtrend/Wave 2 Cyclical Bear Market for HUI/XAU. 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=%5Ehui. ....... http://www.JoeFRocks.com/
HUI/XAU Monthly Upcycle peaked 7-12, which means that the next few weeks may be Wave C down of the Wave 2 Cyclical Bear Market's (HUI/XAU since 5-11-06) Wave A down or Wave B may fill the XAU's upside gap at 159.41 before turning down, so, either way I expect lower cycle lows in the relatively near future than those that occurred on 6-13. Timewise if HUI and the XAU are in an 18 monthish Cyclical Bear Market it makes sense that Wave A hasn't bottomed yet.
The USD recently put in a major cycle low above the prior one, which means it's in a Cyclical Bull Market, that points to a Cyclical Bear Market for HUI/XAU as does the very bearish NEM Lead Indicator, with NEM hitting a likely Cyclical Bull Market cycle high on 1-31-06 versus 5-11-06 for HUI/XAU, and, the most recent long term upcycle was the third/Wave 5 long term upcycle of the Cyclical Bull Market since late 2000, so, it's likely that HUI/XAU began a Wave 2 Cyclical Bear Market on 5-11-06.
Timewise a Wave 2 Cyclical Bear Market is due because very long term secular Bull (or Bear) Markets last 15-20 years (the previous Bear Market for gold lasted 21 years), so, the Wave 1 Cyclical Bull Market since late 2000 was due to peak because it lasted about five and a half years for HUI/XAU and over five years for NEM. There should be two more Cyclical Bull Markets corresponding to Waves 3 and 5 and there should be two 18 monthish Cyclical Bear Markets corresponding to Waves 2 and 4 with Wave 2 probably in effect now.
Index fund trading is a huge factor that most are unaware of. Notice how closely HUI tracked SPX (S & P 500) recently: http://finance.yahoo.com/q/ta?t=5d&s=%5EHUI&l=off&z=m&q=c&a=m26-12-9&a=p12&a=fs&a=w14&c=&c=%5EGSPC.
Tuesday 6-13 was the bottom for (probably) Wave A down of the Wave 2 Cyclical Bear Market's Wave A down, that is also probably the start of an 18-24 month Cyclical Bear Market, so it wasn't really a correction because it's probably the start of an 18-24 month downtrend/Wave 2 Cyclical Bear Market for HUI/XAU. 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=%5Ehui. ....... http://www.JoeFRocks.com/
posted by Joe Ferrazzano at
8:19 AM
