Probably Early Strength Followed By Weakness
The NEM Lead Indicator was a very bullish +1.03% vs the XAU yesterday, which correctly portended some strength today. The most important market timing consideration however is cycle trendlines, which tend to follow Elliot Wave patterns. The XAU Put/Call Ratio (October expiration) fell from 0.87327 yesterday to 0.84470 today, which portends some weakness today, and, XAU Implied Volatility rose significantly less yesterday (+3.02%, from 35.46 on Monday to 36.53 yesterday) than the XAU fell (-4.24%), which portends some weakness today, because the XAU wall of worry fell -1.22%, which is a significant (0.50-1.99%) rise in complacency.
Wave A cycle lows for the major correction since 9-6 for HUI/XAU (since 9-5 for reliable lead indicator NEM) may have occurred yesterday for HUI and on Friday for the XAU. Reliable lead indicator NEM's major correction began on 9-5 and NEM may have put in a wave A cycle low yesterday.
Fed Credit has been below average recently (none yesterday and a small $2 Billion 1 day Repo today). So, there's no rush to go long right now, especially with today being a Fed FOMC meeting. Most of you shouldn't be trading wave B up of a major correction long anyway. But, there are many gold/silver stocks that remain in Cyclical Bull Markets. Any stocks that have completed 18 monthish Cyclical Bear Markets in the past year or two are trading/investing candidates, then you do your due diligence. CDE for example completed a 16 monthish Cyclical Bear Market in mid 2005 if I remember correctly.
The past thirteen weeks and two days the NEM Lead Indicator is a very bearish -12.77% versus the XAU. A vicious multi week decline, similar to the one that occurred from 5-11-06 until 6-13-06 for HUI/NEM/XAU, began on 9-6 for HUI/XAU and on 9-5 for reliable lead indicator NEM. Wave A of this major correction since 9-6 may still be in effect (may last a few more sessions). Wave B up of the major correction since 9-6 might last over a week, Wave B in the prior major correction from 5-11-06 until 6-13-06 did, then it's time for the final Wave C down and another brutal decline for HUI/XAU, in which Wave A of their Cyclical Bear Market since 5-11-06 bottoms, probably in the 100-110 range for the XAU. 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/
HUI NEM XAU Fed credit
Wave A cycle lows for the major correction since 9-6 for HUI/XAU (since 9-5 for reliable lead indicator NEM) may have occurred yesterday for HUI and on Friday for the XAU. Reliable lead indicator NEM's major correction began on 9-5 and NEM may have put in a wave A cycle low yesterday.
Fed Credit has been below average recently (none yesterday and a small $2 Billion 1 day Repo today). So, there's no rush to go long right now, especially with today being a Fed FOMC meeting. Most of you shouldn't be trading wave B up of a major correction long anyway. But, there are many gold/silver stocks that remain in Cyclical Bull Markets. Any stocks that have completed 18 monthish Cyclical Bear Markets in the past year or two are trading/investing candidates, then you do your due diligence. CDE for example completed a 16 monthish Cyclical Bear Market in mid 2005 if I remember correctly.
The past thirteen weeks and two days the NEM Lead Indicator is a very bearish -12.77% versus the XAU. A vicious multi week decline, similar to the one that occurred from 5-11-06 until 6-13-06 for HUI/NEM/XAU, began on 9-6 for HUI/XAU and on 9-5 for reliable lead indicator NEM. Wave A of this major correction since 9-6 may still be in effect (may last a few more sessions). Wave B up of the major correction since 9-6 might last over a week, Wave B in the prior major correction from 5-11-06 until 6-13-06 did, then it's time for the final Wave C down and another brutal decline for HUI/XAU, in which Wave A of their Cyclical Bear Market since 5-11-06 bottoms, probably in the 100-110 range for the XAU. 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/
HUI NEM XAU Fed credit
posted by Joe Ferrazzano at
6:59 AM
