.......Headfake Rally Since Early Friday Peaked
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) peaked yesterday. HUI/XAU put in bearish double tops with their July 12 monthly cycle highs at 353.50 and 150.70. HUI's high yesterday was 354.16 and the XAU's high was 150.70, a rare perfect double top.
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. While the Fed did do it's usual Thursday punch spiking, the one day Repo was a modest size.
XAU Implied Volatility collapsed to 33.47 yesterday/8-23 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 1.16381 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 three days the NEM Lead Indicator is a very bearish -9.88% 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/
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. While the Fed did do it's usual Thursday punch spiking, the one day Repo was a modest size.
XAU Implied Volatility collapsed to 33.47 yesterday/8-23 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 1.16381 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 three days the NEM Lead Indicator is a very bearish -9.88% 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
7:39 AM
