A Very Sharp Rise In Complacency Occurred On Friday
Given the substantial decline in the XAU that occurred during the second half of the week one would have thought that fear would probably rise. Instead, XAU Implied Volatility was little changed at 35.14 at Friday's close versus at 34.895 at Wednesday's close. Also, the XAU Put/Call Ratio fell modestly to 1.08912 on Friday versus 1.09188 on Wednesday. The fact that these important indicators didn't rise substantially given the substantial decline in the XAU is a major negative.
XAU Implied Volatility fell -2.04% to 35.140 on Friday 9-8 from 35.870 on 9-7 versus a -2.85% decline in the XAU on 9-8, which is a very sharp (3-6%) +4.89% rise in complacency (-2.04% + -2.85% = -4.89%. The XAU wall of worry shrank by -4.89%, therefore complacency rose by +4.89%) that portends weakness/a downtrend during part of Monday 9-11's session (complacency is usually contrarian, therefore normally portends weakness, until it reachs an unusually large level (> 6% increase) where it becomes non contrarian). That weakness/a downtrend could follow a gap up at the open and early strength. XAU Implied Volatility tends to indicate a trend/tone rather than necessarily a simplistic up or down session.
The past twelve weeks the NEM Lead Indicator is a very bearish -14.18% 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, probably began on Wednesday for HUI/XAU and on Tuesday for reliable lead indicator NEM. ....... http://www.JoeFRocks.com/
HUI NEM XAU
XAU Implied Volatility fell -2.04% to 35.140 on Friday 9-8 from 35.870 on 9-7 versus a -2.85% decline in the XAU on 9-8, which is a very sharp (3-6%) +4.89% rise in complacency (-2.04% + -2.85% = -4.89%. The XAU wall of worry shrank by -4.89%, therefore complacency rose by +4.89%) that portends weakness/a downtrend during part of Monday 9-11's session (complacency is usually contrarian, therefore normally portends weakness, until it reachs an unusually large level (> 6% increase) where it becomes non contrarian). That weakness/a downtrend could follow a gap up at the open and early strength. XAU Implied Volatility tends to indicate a trend/tone rather than necessarily a simplistic up or down session.
The past twelve weeks the NEM Lead Indicator is a very bearish -14.18% 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, probably began on Wednesday for HUI/XAU and on Tuesday for reliable lead indicator NEM. ....... http://www.JoeFRocks.com/
HUI NEM XAU
posted by Joe Ferrazzano at
8:38 AM
