NEM Lead Indicator = Bullish +0.74% Versus The XAU Today
Which jives with Wave 5 up of the very short term upcycle since mid session yesterday peaking early on Monday, 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.
The COT data (W/E 8-22-06) released at 12:35 pm ish PST (see http://www.cftc.gov/dea/options/deacmxsof.htm) showed the non contrarian gold Commercial Traders trading significantly net long instead of net short. What's happened is they've wisely shortened their trading timeframe to short term (one weekish) cycles versus intermediate term (weeks/months) cycles given the uncertainty regarding exactly how the dramatic Cyclical Bear Market Wave A decline (since 5-11-06 for HUI/XAU and since 1-31-06 for reliable lead indicator NEM) will unfold. The past two weeks they correctly traded net long, in anticipation of the headfake rally that peaked on Wednesday, mostly in the form of short covering (locking in short term profits), but, accompanied by modest long trades. They correctly understood in recent weeks that trading long is risky.
The headfake rally that began early last Friday 8-18 (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 Wednesday. Watch NEM's downside gap at 50.71 from 8-21 and the XAU's downside gap at 140.77 from 8-21, which are likely to get filled next week.
The past ten weeks the NEM Lead Indicator is a very bearish -9.67% 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 COT data (W/E 8-22-06) released at 12:35 pm ish PST (see http://www.cftc.gov/dea/options/deacmxsof.htm) showed the non contrarian gold Commercial Traders trading significantly net long instead of net short. What's happened is they've wisely shortened their trading timeframe to short term (one weekish) cycles versus intermediate term (weeks/months) cycles given the uncertainty regarding exactly how the dramatic Cyclical Bear Market Wave A decline (since 5-11-06 for HUI/XAU and since 1-31-06 for reliable lead indicator NEM) will unfold. The past two weeks they correctly traded net long, in anticipation of the headfake rally that peaked on Wednesday, mostly in the form of short covering (locking in short term profits), but, accompanied by modest long trades. They correctly understood in recent weeks that trading long is risky.
The headfake rally that began early last Friday 8-18 (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 Wednesday. Watch NEM's downside gap at 50.71 from 8-21 and the XAU's downside gap at 140.77 from 8-21, which are likely to get filled next week.
The past ten weeks the NEM Lead Indicator is a very bearish -9.67% 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
1:39 PM
