.........An Important Day For Gold/Silver Stocks
NEM/XAU filled their important upside gaps today (created during 10-3's huge decline, large breakaway gaps to the downside occurred at the open) at 43.21 for NEM and at 129.18 for the XAU, which indicates that 10-4-06's cycle lows for HUI/NEM/XAU are very likely to be important cycle lows, and, in the case of NEM, an extremely important cycle low that probably marks the start of a Wave 3 Cyclical Bull Market (see second chart at http://www.joefrocks.com/GoldStockCharts.html). For HUI/XAU they're now in the bullish Wave B up of their Wave 2 Cyclical Bear Market since 5-11-06. Wave B should last about 3-6 months.
The short term picture is complicated. The NEM Lead Indicator was a modestly bullish +0.45% versus the XAU today, and, today's gaps to the upside by NEM/XAU are large but not overly so. They're not slam dunk breakaway gaps. NEM gapped up from 41.83 to 42.40, which is +1.36%. The XAU gapped up from 125.39 to 127.20, which is 1.44%.
The COT (Commitments Of Traders, see http://www.cftc.gov/dea/options/deacmxsof.htm) data is short term bearish but intermediate term bullish (because of the substantial positive net long weekly change), because the gold Commercial Traders increased their long position by an unusually large (> 10%) 14,526 long futures and options contracts, which portends some significant weakness next week, as does the significant increase in their short position, which increased by 4,024 short futures and options contracts. The Elliot Wave count for the monthly upcycle that began on 10-4-06 for HUI/NEM/XAU is that they are in Wave 3 up (XAU since early yesterday), which is likely to be a big Wave 3 short term upcycle, BUT, after possibly a bit more upside on Monday, a sharp pullback is likely for a session or two.
This is the way I see things right now, it may change, but, it's usually better to buy weakness and sell strength, so, it probably doesn't make sense to chase this rally on Monday. However, assuming I'm correct about the Wave 3 short term upcycle, it looks like a good entry point/pullback is likely during the early to middle part of next week. There shouldn't be too long to wait for all the gold/silver bugs.
The XAU and HUI have been in a Wave 2 Cyclical Bear Market since 5-11-06 and reliable lead indicator NEM was (until 10-4-06) in a Wave 2 Cyclical Bear Market since 1-31-06 (probably ended 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). 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
The short term picture is complicated. The NEM Lead Indicator was a modestly bullish +0.45% versus the XAU today, and, today's gaps to the upside by NEM/XAU are large but not overly so. They're not slam dunk breakaway gaps. NEM gapped up from 41.83 to 42.40, which is +1.36%. The XAU gapped up from 125.39 to 127.20, which is 1.44%.
The COT (Commitments Of Traders, see http://www.cftc.gov/dea/options/deacmxsof.htm) data is short term bearish but intermediate term bullish (because of the substantial positive net long weekly change), because the gold Commercial Traders increased their long position by an unusually large (> 10%) 14,526 long futures and options contracts, which portends some significant weakness next week, as does the significant increase in their short position, which increased by 4,024 short futures and options contracts. The Elliot Wave count for the monthly upcycle that began on 10-4-06 for HUI/NEM/XAU is that they are in Wave 3 up (XAU since early yesterday), which is likely to be a big Wave 3 short term upcycle, BUT, after possibly a bit more upside on Monday, a sharp pullback is likely for a session or two.
This is the way I see things right now, it may change, but, it's usually better to buy weakness and sell strength, so, it probably doesn't make sense to chase this rally on Monday. However, assuming I'm correct about the Wave 3 short term upcycle, it looks like a good entry point/pullback is likely during the early to middle part of next week. There shouldn't be too long to wait for all the gold/silver bugs.
The XAU and HUI have been in a Wave 2 Cyclical Bear Market since 5-11-06 and reliable lead indicator NEM was (until 10-4-06) in a Wave 2 Cyclical Bear Market since 1-31-06 (probably ended 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). 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
2:13 PM
