..................Gap Filling Action Provides Insight
NEM and the XAU are trying to fill the upside gaps (important breakaway gaps) created during 10-3's huge decline early today, at 43.21 for NEM and at 129.18 for the XAU. So far HUI/NEM/XAU have had very little follow through since the initial spike/gap up at the open, which is a negative. But, it looks like reliable lead indicator NEM will fill it's upside gap at 43.21 from 10-3, because it's cycle high so far is 43.07.
If that upside gap gets filled it will just confirm what I already believed, that NEM bottomed at 39.84 on 10-4, hitting an extremely important Wave 2 Cyclical Bear Market Cycle low right at it's Secular Bull Market/very long term upcycle trendline (see second chart at http://www.joefrocks.com/GoldStockCharts.html), on extremely high volume of 17.52 million shares, which means that NEM has probably begun a Wave 3 Cyclical Bull Market.
If the XAU manages to fill it's upside gap at 129.18 from 10-3 today, and it looks like it might, then Wave A of it's Wave 2 Cyclical Bear Market probably bottomed on 10-4-06 a little below 118, whereas HUI's will have probably bottomed on 6-13-06. Both HUI and the XAU may have important double bottoms on June 13/October 4.
It could be that NEM will fill it's upside gap at 43.21 from 10-3 and the XAU will fail to fill it's upside gap at 129.18 from 10-3, which would mean that the XAU (and HUI) is likely to at least test it's cycle low from 10-4 below 118.
The NEM Lead Indicator was a very bearish -0.81% versus the XAU yesterday, and, is probably even more bearish than it seems, because NEM probably bottomed at 39.84 on 10-4-06 and HUI/XAU may not have hit a Wave A cycle low yet for the Wave 2 Cyclical Bear Market since 5-11-06, see charts 1 and 3 at http://www.joefrocks.com/GoldStockCharts.html. The fact that NEM has probably bottomed means that the NEM Lead Indicator will tend to be much more bullish than it previously was, because NEM reliably leads to the upside.
The past sixteen weeks and four days the NEM Lead Indicator is a very bearish -17.06% versus the XAU. The XAU's Secular Bull Market/very long term upcycle trendline is currently at 85-90ish (see third chart at http://www.joefrocks.com/GoldStockCharts.html), so, please keep that in mind. Therefore, the XAU is still 35-40 points above it's primary Secular Bull Market/very long term upcycle (since October 2000) trendline, which is about 30%+.
The XAU and HUI have been in a Wave 2 Cyclical Bear Market since 5-11-06 and reliable lead indicator NEM has been in a Wave 2 Cyclical Bear Market since 1-31-06 (may have ended at 39.84 on Wednesday 10-4). Reliable lead indicator NEM made a new Wave 2 Cyclical Bear Market (since 1-31-06) cycle low at 39.84 on Wednesday 10-4. NEM's Secular Bull Market/very long term upcycle trendline is currently at 40ish (see second chart at http://www.joefrocks.com/GoldStockCharts.html).
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 C down/another brutal decline began on Thursday 9-28 for HUI/XAU, in which Wave A of their Cyclical Bear Market since 5-11-06 bottoms, possibly 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
If that upside gap gets filled it will just confirm what I already believed, that NEM bottomed at 39.84 on 10-4, hitting an extremely important Wave 2 Cyclical Bear Market Cycle low right at it's Secular Bull Market/very long term upcycle trendline (see second chart at http://www.joefrocks.com/GoldStockCharts.html), on extremely high volume of 17.52 million shares, which means that NEM has probably begun a Wave 3 Cyclical Bull Market.
If the XAU manages to fill it's upside gap at 129.18 from 10-3 today, and it looks like it might, then Wave A of it's Wave 2 Cyclical Bear Market probably bottomed on 10-4-06 a little below 118, whereas HUI's will have probably bottomed on 6-13-06. Both HUI and the XAU may have important double bottoms on June 13/October 4.
It could be that NEM will fill it's upside gap at 43.21 from 10-3 and the XAU will fail to fill it's upside gap at 129.18 from 10-3, which would mean that the XAU (and HUI) is likely to at least test it's cycle low from 10-4 below 118.
The NEM Lead Indicator was a very bearish -0.81% versus the XAU yesterday, and, is probably even more bearish than it seems, because NEM probably bottomed at 39.84 on 10-4-06 and HUI/XAU may not have hit a Wave A cycle low yet for the Wave 2 Cyclical Bear Market since 5-11-06, see charts 1 and 3 at http://www.joefrocks.com/GoldStockCharts.html. The fact that NEM has probably bottomed means that the NEM Lead Indicator will tend to be much more bullish than it previously was, because NEM reliably leads to the upside.
The past sixteen weeks and four days the NEM Lead Indicator is a very bearish -17.06% versus the XAU. The XAU's Secular Bull Market/very long term upcycle trendline is currently at 85-90ish (see third chart at http://www.joefrocks.com/GoldStockCharts.html), so, please keep that in mind. Therefore, the XAU is still 35-40 points above it's primary Secular Bull Market/very long term upcycle (since October 2000) trendline, which is about 30%+.
The XAU and HUI have been in a Wave 2 Cyclical Bear Market since 5-11-06 and reliable lead indicator NEM has been in a Wave 2 Cyclical Bear Market since 1-31-06 (may have ended at 39.84 on Wednesday 10-4). Reliable lead indicator NEM made a new Wave 2 Cyclical Bear Market (since 1-31-06) cycle low at 39.84 on Wednesday 10-4. NEM's Secular Bull Market/very long term upcycle trendline is currently at 40ish (see second chart at http://www.joefrocks.com/GoldStockCharts.html).
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 C down/another brutal decline began on Thursday 9-28 for HUI/XAU, in which Wave A of their Cyclical Bear Market since 5-11-06 bottoms, possibly 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
posted by Joe Ferrazzano at
7:10 AM
