Final Spike Of Headfake Rally Since Early Friday?
The headfake rally/short term upcycle (probably not a multiweek monthly upcycle) that began early on Friday (See http://finance.yahoo.com/q/ta?s=%5EXAU&t=5d&l=off&z=l&q=c&p=&a=m26-12-9,p12,fs,w14&c) may have peaked early today. The spike move since late yesterday is typical of what happens at or near cycle highs. Upcycles tend to culminate in spikes. The larger the spike the more likely it's a cycle high. If today's downside gaps created at the open at 52.74 for NEM and at 148.25 for the XAU get filled today, then the short term cycle since early Friday has probably turned down.
HUI/XAU may be putting in nice bearish double tops with their July 12 monthly cycle highs at 353.50 and 150.70. HUI's high today so far is 354.16 and the XAU's high is 150.69.
The Fed's Index Fund trader punch spiking has been very modest since last Friday (http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE), which should add to likely weakness the next few sessions.
XAU Implied Volatility collapsed to 32.75 yesterday/8-22 from 38.37 on 8-15, which indicates that a substantial decline is probably imminent, as does the dramatic rise in the XAU Put/Call Ratio (September expiration) to 1.23549 today from the final August expiration value last Friday 8-18 at 0.66662, because it's an unusually large rise in fear that portends weakness in the near future.
The past nine weeks and two days the NEM Lead Indicator is a very bearish -10.52% vs the XAU. There shouldn't be much relief for longs until Wave A down of the Wave 2 Cyclical Bear Market (since 5-11-06 for HUI/XAU and since 1-31-06 for reliable lead indicator NEM) bottoms in the 100-110 range (XAU) in the next few weeks. For recent action 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=. ....... http://www.JoeFRocks.com/
HUI/XAU may be putting in nice bearish double tops with their July 12 monthly cycle highs at 353.50 and 150.70. HUI's high today so far is 354.16 and the XAU's high is 150.69.
The Fed's Index Fund trader punch spiking has been very modest since last Friday (http://www.newyorkfed.org/markets/omo/dmm/temp.cfm?SHOWMORE=TRUE), which should add to likely weakness the next few sessions.
XAU Implied Volatility collapsed to 32.75 yesterday/8-22 from 38.37 on 8-15, which indicates that a substantial decline is probably imminent, as does the dramatic rise in the XAU Put/Call Ratio (September expiration) to 1.23549 today from the final August expiration value last Friday 8-18 at 0.66662, because it's an unusually large rise in fear that portends weakness in the near future.
The past nine weeks and two days the NEM Lead Indicator is a very bearish -10.52% vs the XAU. There shouldn't be much relief for longs until Wave A down of the Wave 2 Cyclical Bear Market (since 5-11-06 for HUI/XAU and since 1-31-06 for reliable lead indicator NEM) bottoms in the 100-110 range (XAU) in the next few weeks. For recent action 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=. ....... http://www.JoeFRocks.com/
posted by Joe Ferrazzano at
7:21 AM
