Collapsing XAU Put/Call Ratio And The XAU's Upside Gap At 148.12
Normally in a monthly upcycle when the XAU Put/Call Ratio collapses more than 6% (an unusually large rise in complacency) from one session to the next, from 0.68080 to 0.63102 today (August expiration), there will be significant strength for a few hours followed by a significant decline. Today the XAU only rallied very briefly after gapping up then plunged, failing to fill the upside gap at 148.12 created yesterday (see http://finance.yahoo.com/q/ta?s=%5Exau&t=5d&l=off&z=l&q=b&p=&a=m26-12-9%2Cp12%2Cfs%2Cw14&c=), which is a bad sign.
The XAU Put/Call Ratio is at a complacent level of 0.63102 (August expiration) which is a major negative. HUI/NEM/XAU have gone nowhere the past seven sessions, which doesn't happen in a healthy monthly upcycle.
Since HUI/XAU are probably in Wave A down of an 18 monthish Wave 2 Cyclical Bear Market that began on 5-11-06 the surprises will tend to be to the downside/risk is high right now. HUI is below where it traded seven sessions ago and technical indicators like RSI and Williams %R have turned sharply lower.
After this minor intermediate term upcycle since 6-13 peaks I expect lower lows to occur than those that occurred on 6-13, because reliable lead indicator NEM began an 18 monthish Wave 2 Cyclical Bear Market on 1-31-06 and HUI/XAU did so on 5-11-06, and, I'm looking for Wave C down of the Cyclical Bear Market's Wave A down after this minor intermediate term upcycle since 6-13 peaks. The XAU may attempt to fill it's upside gap at 159.41 from 5-15 short term, then look out and batten the hatches.
Given/assuming that NEM began an 18 monthish Wave 2 Cyclical Bear Market on 1-31-06 and HUI/XAU did so on 5-11-06 one should be more cautious now about trading long. The risky Monthly Upcycle began early on Monday 7-24 and a 2% buy signal occurred on Tuesday 7-25. ....... http://www.JoeFRocks.com/
The XAU Put/Call Ratio is at a complacent level of 0.63102 (August expiration) which is a major negative. HUI/NEM/XAU have gone nowhere the past seven sessions, which doesn't happen in a healthy monthly upcycle.
Since HUI/XAU are probably in Wave A down of an 18 monthish Wave 2 Cyclical Bear Market that began on 5-11-06 the surprises will tend to be to the downside/risk is high right now. HUI is below where it traded seven sessions ago and technical indicators like RSI and Williams %R have turned sharply lower.
After this minor intermediate term upcycle since 6-13 peaks I expect lower lows to occur than those that occurred on 6-13, because reliable lead indicator NEM began an 18 monthish Wave 2 Cyclical Bear Market on 1-31-06 and HUI/XAU did so on 5-11-06, and, I'm looking for Wave C down of the Cyclical Bear Market's Wave A down after this minor intermediate term upcycle since 6-13 peaks. The XAU may attempt to fill it's upside gap at 159.41 from 5-15 short term, then look out and batten the hatches.
Given/assuming that NEM began an 18 monthish Wave 2 Cyclical Bear Market on 1-31-06 and HUI/XAU did so on 5-11-06 one should be more cautious now about trading long. The risky Monthly Upcycle began early on Monday 7-24 and a 2% buy signal occurred on Tuesday 7-25. ....... http://www.JoeFRocks.com/
posted by Joe Ferrazzano at
7:45 AM
