...................Some Major Warning Signs
The XAU Put/Call Ratio's collapse again (similar to Friday's collapse) to a complacent 0.64836 today (August expiration), the negative NEM Lead Indicator at -0.86% versus the XAU last week and at -4.31% the week before, and the aggressive long liquidation by the gold Commercial Traders in the five sessions ending 8-1-06, see http://www.cftc.gov/dea/options/deacmxsof.htm, are major warning signs, which jives with my expectation that after this minor intermediate term upcycle since 6-13 peaks I expect lower lows to occur than those that occurred on 6-13, because reliable lead indicator NEM began an 18 monthish Wave 2 Cyclical Bear Market on 1-31-06 and HUI/XAU did so on 5-11-06, and, I'm looking for Wave C down of the Cyclical Bear Market's Wave A down after this minor intermediate term upcycle since 6-13 peaks. The XAU wants to fill it's upside gap at 159.41 from 5-15 it looks like short term, then look out and batten the hatches.
One needs to wait and see if the XAU will fill it's downside gap at 144.88 created at today's open, 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=. If the XAU fills it's downside gap at 144.88 then it will test Friday's potential short term cycle low, so, a short term cycle low may not have occurred Friday.
The XAU Put/Call Ratio's collapse to 0.64836 today from 0.69376 Friday (August expiration) portends a sharp decline today (from higher levels after today's early strength), which appears to have begun as I write this.
For the SLW trade I have to watch Wednesday's downside gap at 10.15ish. It's likely that 10.15 will get filled.
Given/assuming that NEM began an 18 monthish Wave 2 Cyclical Bear Market on 1-31-06 and HUI/XAU did so on 5-11-06 one should be more cautious now about trading long. After this minor intermediate term upcycle since 6-13 peaks I expect lower lows to occur than those that occurred on 6-13.
The NEM Lead Indicator at -0.86% versus the XAU last week and at -4.31% the week before is a strong indication that risk is high right now, though the XAU wants to fill it's upside gap at 159.41 from 5-15. The Monthly Upcycle began early on Monday 7-24 and a 2% buy signal occurred on Tuesday 7-25. ....... http://www.JoeFRocks.com/
One needs to wait and see if the XAU will fill it's downside gap at 144.88 created at today's open, 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=. If the XAU fills it's downside gap at 144.88 then it will test Friday's potential short term cycle low, so, a short term cycle low may not have occurred Friday.
The XAU Put/Call Ratio's collapse to 0.64836 today from 0.69376 Friday (August expiration) portends a sharp decline today (from higher levels after today's early strength), which appears to have begun as I write this.
For the SLW trade I have to watch Wednesday's downside gap at 10.15ish. It's likely that 10.15 will get filled.
Given/assuming that NEM began an 18 monthish Wave 2 Cyclical Bear Market on 1-31-06 and HUI/XAU did so on 5-11-06 one should be more cautious now about trading long. After this minor intermediate term upcycle since 6-13 peaks I expect lower lows to occur than those that occurred on 6-13.
The NEM Lead Indicator at -0.86% versus the XAU last week and at -4.31% the week before is a strong indication that risk is high right now, though the XAU wants to fill it's upside gap at 159.41 from 5-15. The Monthly Upcycle began early on Monday 7-24 and a 2% buy signal occurred on Tuesday 7-25. ....... http://www.JoeFRocks.com/
posted by Joe Ferrazzano at
7:18 AM
