.......The One Year NEM Lead Indicator Chart
See http://finance.yahoo.com/q/ta?s=%5EXAU&t=1y&l=off&z=m&q=l&p=&a=&c=%5Ehui,nem, at the May 11, 2006 Wave 5 Long Term and Wave 1 Cyclical Bull Market cycle highs (reliable lead indicator NEM hit those cycle highs on 1-31-06), the gap between NEM's performance and HUI/XAU's became very wide (NEM dramatically underperformed), and, a dramatic decline occurred from 5-11-06 until 6-13-06, which was probably Wave A down of the Wave 2 Cyclical Bear Market's Wave A down.
At the 6-13-06 monthly cycle low the gap between NEM's performance and HUI/XAU's narrowed dramatically (http://finance.yahoo.com/q/ta?s=%5EXAU&t=1y&l=off&z=m&q=l&p=&a=&c=%5Ehui,nem), indicating that NEM dramatically outperformed HUI/XAU during the brutal decline from 5-11-06 until 6-13-06, when the XAU fell from 171.71 to 119.11 (a -30.63% decline in a month's time). HUI/XAU then had a healthy monthly upcycle until 7-12-06.
During the monthly upcycle from 6-13-06 until 7-12-06 NEM dramatically underperformed HUI/XAU, as evidenced by the wide gap in the one year NEM Lead Indicator Chart (http://finance.yahoo.com/q/ta?s=%5EXAU&t=1y&l=off&z=m&q=l&p=&a=&c=%5Ehui,nem), at which point HUI/XAU began to decline again.
Now the gap in the one year NEM Lead Indicator Chart (between NEM and HUI/XAU) has become very wide again (http://finance.yahoo.com/q/ta?s=%5EXAU&t=1y&l=off&z=m&q=l&p=&a=&c=%5Ehui,nem), and, it looks like the final Wave C decline of the Wave 2 Cyclical Bear Market's Wave A down has begun, and, actually began on 7-12-06. This week's action will probably confirm if that's the case.
I plan to take a good look at the one year NEM Lead Indicator Chart often in this Wave 2 Cyclical Bear Market. It's amazing how well the NEM Lead Indicator has worked in recent years. The crux of my Trade the Cycles system is cycle trendlines in concert with Elliot Wave and gaps, but great indicators like the NEM Lead Indicator, the XAU Put/Call Ratio, XAU Implied Volatility, as well as data like Fed Credit (drives index fund trading) and the COT (Commitments of Traders) data, are also very important.
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/
At the 6-13-06 monthly cycle low the gap between NEM's performance and HUI/XAU's narrowed dramatically (http://finance.yahoo.com/q/ta?s=%5EXAU&t=1y&l=off&z=m&q=l&p=&a=&c=%5Ehui,nem), indicating that NEM dramatically outperformed HUI/XAU during the brutal decline from 5-11-06 until 6-13-06, when the XAU fell from 171.71 to 119.11 (a -30.63% decline in a month's time). HUI/XAU then had a healthy monthly upcycle until 7-12-06.
During the monthly upcycle from 6-13-06 until 7-12-06 NEM dramatically underperformed HUI/XAU, as evidenced by the wide gap in the one year NEM Lead Indicator Chart (http://finance.yahoo.com/q/ta?s=%5EXAU&t=1y&l=off&z=m&q=l&p=&a=&c=%5Ehui,nem), at which point HUI/XAU began to decline again.
Now the gap in the one year NEM Lead Indicator Chart (between NEM and HUI/XAU) has become very wide again (http://finance.yahoo.com/q/ta?s=%5EXAU&t=1y&l=off&z=m&q=l&p=&a=&c=%5Ehui,nem), and, it looks like the final Wave C decline of the Wave 2 Cyclical Bear Market's Wave A down has begun, and, actually began on 7-12-06. This week's action will probably confirm if that's the case.
I plan to take a good look at the one year NEM Lead Indicator Chart often in this Wave 2 Cyclical Bear Market. It's amazing how well the NEM Lead Indicator has worked in recent years. The crux of my Trade the Cycles system is cycle trendlines in concert with Elliot Wave and gaps, but great indicators like the NEM Lead Indicator, the XAU Put/Call Ratio, XAU Implied Volatility, as well as data like Fed Credit (drives index fund trading) and the COT (Commitments of Traders) data, are also very important.
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
12:39 PM
