Reliable Lead Indicator NEM Is Underperforming The XAU
The NEM Lead Indicator is -0.50% vs the XAU right now. Both the XAU Put/Call Ratio, at 0.60544 today vs 0.63102 on Friday (August expiration), which is a very sharp rise in complacency, to go along with the very sharp rise in complacency revealed by XAU Implied Volatility (see previous post), portended weakness/a potentially sharp decline today.
Williams %R for HUI/NEM/XAU has reached a short term oversold level below -80, and, when it hits an oversold extreme near -100 usually a significant bounce occurs. If you're looking to trade short and/or buy put options as I am wait for HUI/NEM/XAU to rise toward the top of their short term trading channels. They're near the bottom of their short term trading channels right now.
The fact that, over the course of the past eight sessions, HUI/XAU "approached" but failed to exceed the July 12 monthly cycle highs, is a major negative short term. It appears that Wave C down of the Cyclical Bear Market's (since 5-11-06 for HUI/XAU and since 1-31-06 for reliable lead indicator NEM) Wave A down may have begun on July 12, and, it may be doing an Elliot Wave ABC down up down pattern, with Wave C down having begun.
A Wave 2 Cyclical Bear Market has probably been in effect since 1-31-06 for reliable lead indicator NEM and since 5-11-06 for HUI/XAU. See my charts at http://www.joefrocks.com/GoldStockCharts.html, with chart 1 showing the Elliot Wave count in February, which correctly indicated that the Wave 5 long term upcycle (began 5-10-04, ended 5-11-06) and therefore also the Wave 1 Cyclical Bull Market (began late 2000) was peaking.
The second chart shows that the USD is now in a Cyclical Bull Market, which is a strong indication that gold/silver stocks are now in a Cyclical Bear Market. It's true that the USD and gold can have a positive correlation for a considerable length of time. This occurred from February 2005, when gold hit a major cycle low, to November 2005, when the USD hit a major cycle high. They both trended up for about nine months, so, they enjoyed a positive correlation. The third chart shows that the NEM Lead Indicator correctly pointed to a major downturn, that is probably an 18 monthish Wave 2 Cyclical Bear Market.
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/
Williams %R for HUI/NEM/XAU has reached a short term oversold level below -80, and, when it hits an oversold extreme near -100 usually a significant bounce occurs. If you're looking to trade short and/or buy put options as I am wait for HUI/NEM/XAU to rise toward the top of their short term trading channels. They're near the bottom of their short term trading channels right now.
The fact that, over the course of the past eight sessions, HUI/XAU "approached" but failed to exceed the July 12 monthly cycle highs, is a major negative short term. It appears that Wave C down of the Cyclical Bear Market's (since 5-11-06 for HUI/XAU and since 1-31-06 for reliable lead indicator NEM) Wave A down may have begun on July 12, and, it may be doing an Elliot Wave ABC down up down pattern, with Wave C down having begun.
A Wave 2 Cyclical Bear Market has probably been in effect since 1-31-06 for reliable lead indicator NEM and since 5-11-06 for HUI/XAU. See my charts at http://www.joefrocks.com/GoldStockCharts.html, with chart 1 showing the Elliot Wave count in February, which correctly indicated that the Wave 5 long term upcycle (began 5-10-04, ended 5-11-06) and therefore also the Wave 1 Cyclical Bull Market (began late 2000) was peaking.
The second chart shows that the USD is now in a Cyclical Bull Market, which is a strong indication that gold/silver stocks are now in a Cyclical Bear Market. It's true that the USD and gold can have a positive correlation for a considerable length of time. This occurred from February 2005, when gold hit a major cycle low, to November 2005, when the USD hit a major cycle high. They both trended up for about nine months, so, they enjoyed a positive correlation. The third chart shows that the NEM Lead Indicator correctly pointed to a major downturn, that is probably an 18 monthish Wave 2 Cyclical Bear Market.
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
7:25 AM
